The Northern Ireland international has signed for Edgar Davids' side on a one-month deal.
The 20-year-old has made 14 appearances for the Hornets, two of them this season, and turned out three times for Wycombe during a loan spell.
He has two caps for Northern Ireland and made his debut against Scotland in 2011.
Thompson goes straight into the squad as Barnet welcome Bradford to Underhill on Saturday.
Meanwhile, goalkeeper Liam O'Brien has joined Ryman Premier League side Hastings on a 28-day loan.
The 21-year-old is expected to make his debut for them in Saturday's FA Cup third-round tie at Middlesbrough.