Mills, 30, has fallen out of favour at Manchester City in recent seasons and has spent time on loan at Hull City. New City boss Sven Goran Eriksson has made no secret of his desire to ship out some of his squad after a rapid spending spree following his appointment and the takeover of the club by Thaksin Shinawatra.
It had been mooted that Mills might return to his first club, Norwich, in the same manner as Jamie Cureton and Darel Russell. Alan Pardew, however, has moved to strengthen his defence with the loan signings of Mills and Reading's Sam Sodje, both of which are likely to be tied up before the end of the transfer window.
It is unknown whether Canaries boss Peter Grant will make any further moves in the transfer market after a busy summer, but injuries have left his squad stretched even at an early stage in the season.