Ferguson has fallen out of favour at St James' Park since the arrival of several players during the January transfer window, but the Northern Ireland international has insisted that he is happy to have been given an opportunity at St Andrew's.
The 21-year-old told the Birmingham Mail: "I'm really happy to be here. At the start of the season at Newcastle, the squad was so small that none of the lads could get out on loan. And I was playing too.
"When the new players started to come in, arriving in January, it made it harder for us younger ones, but then the chances of a loan were better.
"Gaining experience and playing is the main thing, and when Birmingham came in, I was delighted. Obviously it is a huge club and hopefully we can get higher and progress from where we are now."
The winger could make his debut when Birmingham face Hull City on Saturday.