The 21-year-old was a target for the Bhoys over the summer, however, the two clubs failed to see eye-to-eye on a deal and he remained at Stamford Bridge.
Musonda has not featured heavily in Antonio Conte’s plans this term and Celtic boss Brendan Rodgers, who has known the Belgian for some time, opted to return for him this month.
The winger will spend the next 18 months north of the border and he insists it was an easy decision to make as he looks to step up his development.
Musonda told Celtic’s website: “It’s simple for me – Celtic is a massive club.
“It’s a club with many fans, an unbelievable passion, and the culture is more than a club. Those were the most important things, and I wanted to go somewhere where I would enjoy my football, and I know the manager as well. I am very happy to be here.
“It’s a massive club and I am really looking forward to it. I was quite close to coming last summer but it didn’t happen.
“I spoke again with the manager a couple of weeks ago and I said I had a feeling that this is where I want to come and play my football. I am very lucky to be here and I am very happy to be here.”
Uwe Rosler was sacked by Fleetwood following a 3-0 reverse at Doncaster which condemned Town to a seventh straight defeat in all competitions.
Cambridge interim head coach Joe Dunne was pleased with how his side adapted to beat Grimsby 3-1.
Southend manager Chris Powell led the applause for Jason Demetriou after the right-back scored twice in the 3-1 win against Portsmouth at Roots Hall.
Morecambe boss Jim Bentley was the happier manager after Gregg Wylde's 90th-minute strike earned his side a point in their 1-1 draw with Forest Green.
Manager Gareth Ainsworth described Wycombe's 2-0 win at Cheltenham as a thoroughly professional performance.
Skipper Richard Wood scored the winner just before half time as in-form Rotherham pulled off a 1-0 victory at League One leaders Shrewsbury.