The 20-year-old, a product of the Blades academy, made his debut for the South Yorkshire outfit as a substitute against the Brewers in the League Cup back in August 2012.
Burton manager Gary Rowett told reporters: "We are delighted to have got Callum on board. He is a player that we have watched a lot and we are really grateful to Nigel [Clough] at Sheffield United for allowing him to join us.
"He can play anywhere down the left hand side, has good quality and his energy and versatility will be a great addition to the squad for this important month."
McFadzean, who has also represented England at Under-16 level earlier in his career, is expected to go straight into the squad for tomorrow's game away at Scunthorpe United, and has reportedly been given squad number 15.