"Stephen's experience is terrific, but not only that, his quality on the ball has been a big plus for us," Blues manager Alex McLeish has told the Birmingham Mail.
"His use of the ball, from full-back, is so important and Stephen's all-round game has been excellent.
"I'm delighted we acquired Stephen, it was one that was totally out of the blue and a guy who had apparently retired. I was fortunate enough to have the right contacts to bring him in.
"A new deal is in the offing and something will be tied up in the next couple of days."