The Hornets have secured the highly-regarded 20-year-old's services until January 2, with an option to extend the loan until the end of the season.
The England Under-21 international, who has played 22 times for the Blues, will join up with Gianfranco Zola's squad after Saturday's fixture with Barnsley.
He has previously spent time on loan with Middlesbrough and Swansea.
- Sports & Recreation
- Gianfranco Zola