The Royals chairman Sir John Madejski said: "I would like to welcome Jay to Reading and I sure his signing will strengthen our squad as we push for an immediate return to the Premier League.
"We are entering a crucial final stage of the season and Jay's signing will bolster a squad that has already well so far this season."
Manager Steve Coppell added: "He is a player I know well and I am certain he will supplement our squad as we go into this final third of the season."