Cani has spent the last eight and a half seasons at El Madrigal after moving from Real Zaragoza in 2006, featuring in over 300 games for Villarreal.
The 33-year-old has started only five La Liga matches this term, but will now get the opportunity to fight for a place in Diego Simeone's title-chasing side.
Atletico announced the arrival of Cani on their official website.
A statement from the club read: "Atletico de Madrid and Villarreal have reached an agreement for the loan of Ruben Gracia Calmache, Cani, until the end of the season.
"The Aragonese midfielder... passed the corresponding medical examination and has signed with our organisation for the rest of the season."
Atleti sporting director, Jose Luiz Perez Caminero, said: "He [Cani] is an experienced player in our league and with a tremendous quality that will increase competitiveness within the group.
"He's used to handling great responsibility and we are very happy with his arrival because we believe he will contribute a lot to the team at this crucial point of the season."
