Isgrove, a Wales Under-21 international, will remain with Posh until the conclusion of their League One campaign on May 3 and will be eligible when Darren Ferguson's men face Chesterfield in the Johnstone's Paint Trophy final at Wembley at the end of this month.
Saints executive director Les Reed told his club's official website: "As it is generally not our policy to put large numbers of our young development players out on loan, we can be selective when assessing opportunities for the more senior players to gain unusual or beneficial experience.
"Lloyd has a fantastic opportunity to experience playing in a team competing for promotion and for victory in the Johnstone's Paint Trophy.
"He has had significant experience training with our first team and being in the squad and on the bench, so is now ready for this short-term challenge.
"Peterborough play the correct way and with a style which will suit 'Izzy'. We look forward to monitoring his progress of the rest of the season and welcoming him back in the summer for the challenge of the new season."
Isgrove is expected to go straight into the Peterborough squad that travels to MK Dons on Saturday.