The experienced striker, 27, arrives from Swansea having fallen down the pecking order under new manager Michael Laudrup, only making the club's matchday 18 once this season as an unused substitute in the Capital One Cup first round.
Lita made four Premier League starts and a further 12 appearances from the bench last term, scoring twice, while he enjoyed a total of 18 outings in all competitions.
Blues boss Lee Clark told the club's official website: "I know Leroy very well having worked with him at Norwich during a loan spell in which he scored seven goals in 16 games. He's a proven goalscorer who has power and pace and there's no doubt he'll add quality to my squad."
Lita arrived in south Wales last summer following two seasons with Middlesbrough, having previously made his name during spells with Bristol City and most notably Reading as well as loan stints with Charlton and Norwich.
The frontman, who underwent a medical on Thursday morning, will remain at St Andrew's until the middle of December although Swansea boast a 24-hour recall clause after the first 28 days of his stay.