The 32-year-old Ghana international midfielder is a former English Premier League winner with Leicester City.
He previously spent time out on loan with Brentford but he has now moved to Scotland for the remainder of the current campaign.
Celtic manager Brendan Rodgers expressed his delight at the signing.
He said on BBC Sport: "He is a fantastic guy, someone with real high-level experience and with great attributes including power, pace and versatility.
"I know that he can be a really important addition to our squad this season."
Upon signing his new deal, Schlupp added: "The team has already done brilliantly this season, both domestically and in Europe, and I know I am joining a really successful team, but I want to add to this, to play my own part and help us achieve even more."
Newcastle manager Eddie Howe has confirmed that Alexander Isak's absence from the squad in Saturday's 4-0 preseason defeat to Celtic was a direct result of ongoing transfer speculation surrounding the striker.
Ibrahim Said has signed a two-year deal with Scottish Premier League side Motherwell.
Crystal Palace defender Jeffrey Schlupp has bid an emotional farewell to the English Premier League club after eight years of service.
Bayern Munich defender Alphonso Davies credited his crucial last-minute goal, which helped Bayern secure a 3-2 aggregate win over Celtic and advance to the Champions League Round of 16, to "instinct."
