The 18-year-old starlet recently spent a month with Ipswich and made two Championship appearances.
The youngster trained with the Bantams on Friday and is eligible to be included in the squad for Saturday's league clash with Bristol City.
Graham has represented both England and the Republic of Ireland age-group sides and was involved in the Villa youth side that won the NextGen series last season.
Meanwhile, the Bantams have also signed Sheffield Wednesday keeper Arron Jameson on loan until February 11.
The 24-year-old has made just two appearances for Wednesday - during the 2010-11 season in League One.