The 18-year-old midfielder caught the eye during a similar spell at Watford last season - helping them to the Championship play-off final.
He has now returned for a second stint in the second tier, at another side harbouring promotion ambitions.
Chalobah is yet to make a competitive appearance for Chelsea and remains some way down the pecking order in a squad brimming with creative talent.
He is, however, still learning his trade and is prepared to head out of Stamford Bridge in order to get games and aid his development.
He grabbed five goals for Watford in 2012/13 and will be looking to produce more of the same during his time at the City Ground.
Chalobah will also want to catch the eye of Jose Mourinho and prove that he has a future both with Chelsea and on the Premier League stage.