The Sweden international has scored three goals in 19 games for Martin Jol's side this campaign but he has not played for Fulham since they lost 4-1 to Manchester United in the FA Cup on 26 January.
Kacaniklic has been signed in time to be involved in Burnley's Championship game with Charlton on Saturday and will link up again with Sean Dyche, who he played under at Watford last season.
"He is an exciting young prospect and something different to what we have, which is important. He's dynamic and can mix up his game," said Dyche.
"He was with us at Watford last year and was then called back and went into Fulham's first team, which is obviously a good sign.
"He has started this season in the Premier League and got himself a couple of goals.
"It's a good link with Fulham. They know their player was looked after at Watford. He is aware of us as a staff and knows he will get looked after here.
"That's one of the key things. We do look after players here. We look to develop our own and anyone who joins us."