The 30-year-old Wales international will remain at the City Ground until January 29 next year and could make his debut against former club Blackpool on Saturday.
Vaughan joined the Black Cats from the Seasiders on a free transfer in 2011 and had made 59 senior appearances for the club.
His three goals include a stunning strike in the 3-0 derby victory at Newcastle in April.
Source: PA
Source: PA