Elphick has endured a frustrating 18 months in the West Midlands, with the centre-back making just 32 appearances since signing from Bournemouth.
The 30-year-old featured regularly over the Christmas period but with Villa having brought in Manchester United youngster Axel Tuanzebe, Elphick has been given permission to spend the rest of the campaign at the Madejski Stadium.
Manager Jaap Stam told the club's official website: "With the injuries we have at the back, we needed to bring in an extra defender and we were looking for someone who can add individual ability, quality and experience to the squad.
"Tommy is a player who does just that; he can play in the style we want to play and the experience he brings to the squad is also going to be very important. We are very pleased to have him here."
Elphick joins Reading with the Royals sitting just four points above the relegation zone in the Championship standings.