Forte, 26, who left Bramall Lane in 2007 when he signed for Scunthorpe, is the club's third signing during the January transfer window following the arrival of Danny Higginbotham and Jamie Murphy.
"People will be familiar with Jonathan's talents and we are delighted that he has accepted our offer to come and play," Blades boss Danny Wilson told the club's official website.
"His goalscoring record is very good and hopefully he can improve that back in Sheffield with us - he is undoubtedly a player with great potential."
Forte, a product of the club's Shirecliffe academy, made his Blades debut in an FA Cup tie against Nottingham Forest in 2004 and went on to make 39 appearances.
He had loan spells at Doncaster and Rotherham before signing permanently for Scunthorpe and after Southampton had paid an undisclosed fee for him in January 2011 had temporary stints at Notts County, Preston and Crawley.