The 24-year-old Italian, who operates as either an attacking midfieder or as a striker, has joined Blues on an emergency loan until the end of the season.
Fabbrini joined Watford from Italian side Udinese in 2013 but has recently spent a three-month loan spell at Millwall in which time he made 13 appearances for the Lions.
As part of the loan deal, the Hornets do have the option to take Fabbrini back to Vicarage Road after 28 days should they wish to do so.