The former Reading and Norwich man can play in midfield or at full-back and goes straight into the squad to face Burnley.
He made 139 appearances for Leeds in a three-and-a-half year stay at Elland Road.
Iron manager Ian Baraclough said: "He was desperate to come because he is at the age where he wants to play games.
"He is one of the fittest lads at Leeds and it is a coup for us to bring someone with his leadership into the team."
Hughes played alongside Baraclough during his time at Notts County and expressed his delight at a fresh challenge.
"I'm really honoured to have been given this opportunity", he told the Official website.
"I want to play as many games as I can and enjoy success at Scunthorpe United".