Shittu has failed to establish himself as a regular at Bolton following his summer move from Watford to the Reebok Stadium.
He has made just five Premier League starts and his chances of breaking into the side were not helped last month when Gary Megson signed another centre-back in Sebastien Puygrenier.
Shittu does not appear to figure in Megson's long-term plans either and Birmingham are interested in bringing him in to boost their promotion hopes.
Bolton are prepared for Shittu to head to St Andrews on loan for the rest of the season, before making the move permanent in the summer.
Blues managing director Brady said: "Bolton offered me a loan deal for Danny Shittu, leading to a guaranteed buy."