The 20-year-old, currently on England under-21 duty, began the campaign at Wolves on loan, but was recalled as cover when David James got injured.
He recently recovered from a hand injury which ruled him out of action for most of the winter, and, upon his return, has shared reserve team duties with David Forde, who was recently signed for £70,000 from Barry Town.
With Sven Andersson and Shaka Hislop also fit, the deal gives Steve the chance of moving to a less competitive environment with the opportunity of more regular football.
Cardiff, managed by Lennie Lawrence, are currently seventh in division two and aiming for promotion via the play-offs this season.
Anthony Dean, meanwhile, has rejoined Stevenage Borough on trial after playing for QPR against the Hammers on Thursday. Anthony will be leaving the club this summer.
* Despite reports, the club have not received official notification of the rearranged date for the Premiership match against Arsenal at Highbury.