The 25-year-old started with Hafnarfjordur and has played for Spurs, Malmo and Lyn Oslo before signing for Reggina in 2007.
Simon Davey told www.barnsleyfc.co.uk: "Emil has now joined us on loan for the season and we are delighted to have brought him to Oakwell. He has experience of playing at the very highest level both in Italy and with Iceland and will be a valuable addition to our squad".
Hallfredsson will wear the squad number 14.