Hutton has found himself frozen out of Paul Lambert's plans this season at Villa Park and has been forced to train away from the first team.
Lambert is happy to loan out the Scotland international after trying to offload the full-back during the summer transfer window.
The 27-year-old is set to go straight into the Forest squad for this weekend's clash with Wolves.
Forest chairman Omar Al Hasawi was delighted to land former Rangers and Tottenham defender Hutton on loan.
He said: "Like most of the signings we have made, Alan brings great experience to our squad.
"He has played at the very highest level and will be a big asset to us over the next six weeks."