Neal, 27, made 73 appearances for the Lilywhites following his arrival from Stoke City in the summer of 2005 but had not featured at all this season and had been loaned out to Notts County.
The Cumbrians boss Greg Abbott told the News & Star: "Lewis is an excellent footballer and we have actually had to fight off a number of other clubs to get him.
"He will provide us with strong competition for the left-hand side, which is good for the squad."