The 33-year-old, who also counts Dundee, St Johnstone, Swansea and Wigan as his former clubs, will go straight into David Flitcroft's squad for Tuesday night's home league game against Millwall.
"He came to watch us at Hull on Saturday and he loved the resilience and the resolve," Flitcroft told BBC Radio Sheffield.
"This is a guy who isn't interested in money, he just feels he has something to offer to a Championship team."
Scotland left Ipswich by mutual consent last week after making close to 100 appearances and scoring 21 goals.
"I'm looking forward to getting back to playing football," Scotland told Barnsley's official website.
"Everyone is really positive here. I'm going to try and bring more goals to this team."
The Trinidad & Tobago international made over 100 appearances for Swansea during a two-year spell with the club before being sold for £2million to Wigan in the summer of 2009. He signed for Ipswich for an undisclosed fee in August 2010.
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- David Flitcroft