The 27-year-old recently spent six weeks on loan at the Banks's Stadium from Chesterfield - a deal which saw him score one goal in seven appearances before it came to an end at the start of January.
Westcarr subsequently had his contract with the Spireites cancelled by mutual consent upon his return to the Proact Stadium, and the Saddlers have now moved for his services on a short-term contract.
"I'm pleased to have signed this deal and now I just want to settle down and concentrate on my football," he told the club's official website.
"I'm really looking forward to the challenge. Since the very first day I arrived here, this club has always been a perfect fit for me and I believe that I can really progress here."
Meanwhile, Walsall youth-team captain and centre-back Matt Preston has penned professional terms with the midlands club.