The midfielder is no stranger to Shrews having enjoyed two months on loan over the second half of last season, making 15 league starts and helping the Shropshire club earn automatic promotion from League Two.
McAllister has made 17 appearances for the Blades this season, starting 12 of those, and bagged the only goal of the game when the two sides met on the opening day. But the South Yorkshire club have opted to let him go.
Manager Graham Turner told Town's official website: "I think initially it was a surprise that Sheffield United would sell him as he's figured in a lot of their games. But I think the fact he has been here, he knows all about us, knows the professional attitude, the work ethic here, I think it did help in his decision to join us."
McAllister, 24, has put pen to paper on a two-and-a-half-year deal at the Greenhous Meadow.
- Sports & Recreation