The 26-year-old impressed in training with City and becomes Kevin Keegan's first signing following the opening of the transfer window.
Belmadi has signed a contract at Maine Road until the end of the season but City have no option to buy him outright.
Belmadi, who has played 15 times for Marseille this season links up once again with Algerian compatriot Ali Benarbia and his signing probably ends Keegan's interest in former England international Ray Parlour from champions Arsenal.