The attacking midfielder, who has been capped by Scotland, said he had “good vibes” about moving to Easter Road.
Shinnie, 27, played against Hibs for Birmingham in pre-season but will now attempt to help Neil Lennon’s side win promotion back to the top flight.
“I was here in pre-season and I took part in the game and Hibs played very well that day,” Shinnie told Hibs TV. “The stadium was lovely, the pitch was great and I got good vibes from it.
“I played here before from my past days in Scotland. I know how big a club this is, how big the fanbase is and a lot of factors came into account.”
The deal, which is subject to international clearance, will help bolster the Hibs midfield following the return of Liam Henderson to Celtic at the end of his loan spell.
Lennon had hoped to bring Henderson back to Hibs but has admitted that such a deal now looks unlikely.
Shinnie is experienced in the Scottish game. He joined Birmingham in 2013 from Inverness Caledonian Thistle, and has previously enjoyed loan spells with Dundee in 2008/09 and 2010, as well as with Rotherham United earlier this year. He began his career with Rangers and is the older brother of Aberdeen defender Graeme Shinnie.