His best spell at the club was during Little's reign as Tigers manager, winning the Player of the Year award in the 2000/01 season that ended with play-off defeat.
Since returning to his native Jamaica in 2002 he has struggled with injury problems, but Little believes he can get the best out of the player once more.
He told the Tranmere official site: "Ian is a very experienced defender which we have needed. We have been playing recently with only one recognised centre back so this will now give me the option to move players around.
"He has made over 100 appearances for his country including two World Cups and he has settled into the club very well over the last few weeks. I am delighted with the signing."
The 31-year-old had problems acquiring a work permit, but now the red tape has been cleared he will go into Rovers' squad for their game against Oldham tomorrow. Little's side are currently 12th in Division Two and face Millwall in the quarter-finals of the FA Cup next month.