The 30-year-old, whose first loan deal with the Championship side expired earlier this week, has been given the opportunity by his parent club Sunderland to remain at the City Ground until the end of the season.
"I like the way we play, we've got a good squad and the ambitions of the club are in line with what I want to achieve," Vaughan told the club's official website. "It's good a good opportunity for me.
"A key factor behind me coming back here was to be part of a squad pushing for promotion. The players believe in what the manager is trying to achieve and we're all in it together with the same aims, which we'll work hard to achieve."
Forest currently occupy fifth position in the Championship.