The deal, a 93-day agreement, will not officially start until Saturday when Albion host Scunthorpe at the Pirelli Stadium, taking the loan beyond the busy Christmas programme to December 29.
Brewers boss Gary Rowett has been looking for cover at centre-half for several weeks and has stepped up his search following the suspensions of Ian Sharps and Marcus Holness.
More specifically, Rowett has wanted a left-sided central defender to balance his back line and Cansdell-Sherriff, who spent last season on-loan at Rochdale, fits the bill perfectly.
Rowett ran the rule over the 30-year-old in Preston's Premier League Under-21s Cup tie against Hull on Monday afternoon - a game in which Cansdell-Sherriff captained the North End team.
Burton had shown interest in the Australian, who is in the final year of his contract at Deepdale, ahead of last month's transfer deadline but no deal materialised
He is set to make his Burton debut in their Sky Bet League Two fixture at home to Scunthorpe on Saturday.
Cansdell-Sherriff joined Preston in July 2012, arriving on a free transfer after leaving Shrewsbury - where he played alongside Sharps.
Boss Rowett said: "With the current injuries and suspensions I felt it was important to bring in cover at the back and we are delighted to have acquired the services of Shane who has experience at playing both League One and League Two football.
"He's versatile player and one we have had our eye on for a while. He certainly fits the bill for what we need at the moment and I have no doubt he will prove an asset to the club during his time here."