The former Walsall, Bolton and Middlesbrough striker joins the Bluebirds after spending time on loan last season with Stoke City.
The 26-year-old will remain with the South Wales club until January and will join Cameron Jerome and Alan Lee as competition for a place up front.
"I'm pleased to get the lad in, a player who at his best will be a big asset," manager Dave Jones told the club's official website.
"Everybody deserves a second chance and I'm sure that Michael will give his best for Cardiff City."
Cardiff failed earlier in the day with a £300k offer for Wycombe striker Nathan Tyson, but then turned to Ricketts who himself had already turned down a move to Russian club Samara because he did not want to move to eastern Europe.