The 28-year-old joined Claudio Ranieri's charges in January 2013, but started just three games in Monaco's successful bid for promotion from Ligue 2.
Medjani was subsequently sent out on loan to Greek outfit Olympiacos at the start of the season, but failed to nail down a regular starting spot.
A statement on Valencienne's official website read: "Central defender Carl Medjani has officially committed with Valenciennes.
"The experienced Algerian international joins on loan until the end of the season from AS Monaco.
"His strength in the tackle and his state of mind are a real benefit to the Valenciennes defence."
Valenciennes have endured a frustrating campaign in France's top flight this season, and currently sit in the relegation zone with just 14 points.
