The midfielder was shipped out to Azerbaijani side Gabala in the summer after previous boss Pedro Caixinha made it clear that the player would not feature in his first-team plans.
It is believed the 26-year-old did not have a recall clause in his loan contract, but Rangers were able to reach a deal with Gabala which would allow Halliday to come home six months early.
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Hide AdHe’ll return to Glasgow in time to get reacquainted with his team-mates before they all fly out to Florida for the team’s winter break.
The news will come as a relief to manager Graeme Murty, who has witnessed his midfield corps become plagued by injury problems in recent weeks.