Beattie, a free agent since leaving Rangers in the summer, will stay at Bramall Lane until mid-January.
The 33-year-old, who scored 34 goals during his season-and-a-half stay at Bramall Lane before being sold to Stoke for £3.5million in January 2009, told the club's official website: "I'm delighted to be back. Sheffield United is a club that is very close to my heart.
"I was at the [Carlisle] game on Saturday and the fans were singing my name, which was nice and this was always one of the clubs I wanted to return to.
"I've signed a deal until January, which is good for me, but more importantly the club, given I haven't played much at all in the last 18 months to two years."
Blades boss Danny Wilson added: "After speaking to him a couple of times, we both felt relaxed about the situation, but, despite other interest, he was determined to return here, which is fantastic."