The center back made a deadline day switch to the Stade Louis II side and Claudio Ranieri will have the choice to secure him permanently in the summer.
The Tunisia international has signed a deal until the end of the season with the Ligue 1 title challengers, who will then have the option to sign the 24-year-old on a four-year contract.
Abdennour has made 82 appearances for Toulouse, earning a reputation as one of the more talented defenders in the French game, and the center back, who can also operate on the left side of the defense, was quick to express his delight at securing a move to the Stade Louis II.
"I am very proud, Monaco are a great club, very professional, with excellent staff, great players and great ambition," he told the club's official website. "I am ready to help my teammates. I will do everything to succeed. We have a special purpose."
Abdennour follows in the deadline-day footsteps of Dimitar Berbatov, who has joined on loan from Fulham for the remainder of the 2013-14 campaign.