He only scored once for the Magpies and joined Norwich City before dropping to the second division with Wigan.
He joined Blackpool at the start of the season, but will be moving to America in the summer and has come to Glanford Park on loan to get back some more first team football under his belt before his move.
Dalglish has always played as a striker, but Iron manager Brian Laws says that the player is also comfortable on the right wing.
Laws said: "Paul has played at a higher level, he is still only 26 and he is a player who will give me options.
"If you can strengthen your side while you are doing well then it is the best time because the player is coming into a settled and happy environment."
Dalglish trained with his new teammates for the first time this morning, and says that he is looking forward to helping United to promotion.
He said: I can't wait, it will be good to be playing games again and hopefully at the end of it we will be going up a division.
"We are going to try and achieve promotion, I know a few of the lads and there are some good players here so hopefully we can achieve that.
"I haven't really got a preferred position, as long as I'm playing I'm happy. I will player wherever he (Laws) wants me to play and hopefully do my best."
Click here to view Dalglish's player profile.