The 33-year-old made 139 appearances for Leeds, scoring his only goal at Millwall and playing in numerous positions.
Whites boss Simon Grayson told the club's official website: "Hughesy has been a big part of things here, going back to before I came to the club. He joined at what some would have considered a difficult time and he has been a great servant during his time with the club. He was always willing to step in and do whatever was asked of him.
"The move to Scunthorpe offers him an opportunity to play regular football again, and on behalf of everyone at Leeds United, I would like to thank him for all his efforts and wish him all the very best at Scunthorpe."
Scunthorpe boss Ian Baraclough believes Hughes' experience will prove important to The Iron's Championship survival fight: "I've got no qualms about throwing him straight in," Baraclough told Scunthorpe's official website. "He was desperate to come because he's at the stage of his career where he just wants to play games.
"He's a very fit lad and we haven't got to worry about the age side of things because he's one of the fittest lads at Leeds.
"I think it's a real coup to be able to bring someone like Andy into the club because he will bring leadership and will help the younger lads. His character will rub off on everyone else I'm sure."