Stead penned a loan contract with the Bantams this Thursday which will keep him at the Coral Windows Stadium until the end of May.
The 31 year-old's previous loan agreement with City expired after last Saturday's 3-3 draw at Millwall in the F.A Cup.
Subject to receiving the relevant F.A and Football League clearances, the new deal for Stead now means the forward will be eligible for Saturday's match with Rochdale.
After finishing last season on loan with the Bantams, Stead rejoined Phil Parkinson's squad back in October for a second spell at Valley Parade.
He quickly became a regular in Parkinson's starting line up, helping City to their current ten-game unbeaten streak and Play-Off position.
The striker has four goals and four assists to his name so far this campaign for City.
Parkinson said: "Jon has been terrific for us this season and during the second half of last season.
"He made a significant contribution to latter stages of our campaign last season and this season he has continued in the same vein.
"He has shown a great attitude on and off the pitch and he is a great example to all our young players.
"Jon has shown he can play up front with a number of different players and in a number of different systems since he's come here.
"Jon came in at a time when James Hanson was struggling with injury and he has played a big part in our current run of form.
"We are delighted to have kept him with us and we look forward to working with him for the rest of the season."