The Scotland international has joined the Primera Division club until the end of the season, having not featured for Villa this term.
Mallorca, who are 19th in the 20-team Primera Liga with only four wins this season, will also retain an option to agree a permanent transfer in the summer.
Hutton said: "I hope to give all I have to offer. I am very excited to come to this club. I was very excited to be able to come to play in Spain.
"For me it is a new project, a new league, a new country, and I have come with lots of knowledge because I've been able to speak with players I know.
"I knew about the interest from Mallorca about two months ago, and from then on I told my agent it was my first and only choice."
Hutton moved to Villa Park in 2011 from Tottenham in a deal thought to be worth £3m and although he was a regular under Alex McLeish last season, he has failed to make an impact since Paul Lambert's arrival.
The 28-year-old was loaned out to Nottingham Forest in November and played seven games for the Championship side.