The 30-year-old has struggled to cement a starting place since the arrival of boss Henning Berg.
After 11 appearances in the Championship this season, Orr was an unused substitute in the 1-1 draw at home to Birmingham, having to make way for 18-year-old Adam Henley.
Orr's deal with Mick McCarthy's side is due to end on 26 January.
The veteran defender moved to Ewood Park in January this year after a spell of nearly three years with QPR, but he revealed that off-the-field matters at Rovers were the main reason behind his desire to join the Tractor Boys.
He told the East Anglian Daily Times: "There were a few things going on in the upper echelons of the club at Blackburn and I wanted to get out on loan.
"Once I heard of Ipswich's interest, I was really keen to come down here. Thankfully we've managed to get something sorted and I'm absolutely delighted.
"I know Ipswich well from playing here a number of times. It's a big club and it's an honour to be here," added Orr, who is also considering making the move a permanent deal.
"We have talked about me staying," he said. "That's the plan and I'd certainly be interested in a permanent move. If the manager and the powers that be want that to happen, I could be here longer than the loan date."