The 25-year-old, who had been on loan with The Seasiders since last November, mutually agreed to terminate his contract with The Rams before signing with the Bloomfield Road club until the season's end - with the option for a further 12 months after that.
Blackpool boss Steve McMahon believes Elliott provides his side with much-needed balance to their play.
"Steve is a smashing lad, the players love him and he gives us balance on the left-hand side," McMahon told the club's official website.
Elliott is the second defender to be signed this week by McMahon, with Sean Hessey joining The Seasiders until the end of the season on Monday.
