The midfielder had been in and out of the Watford team and has joined The Rams on loan until the end of the season.
"John was pretty close to the top of our list and we've liked the look of him the past couple of seasons," said Derby boss Nigel Clough to BBC Radio Derby.
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Another former City midfielder Terry Yorath is Margate FC's Manager/ Director Of Football.
Introduced to the Kent side by a relative, Yorath took over in the summer and the 59 year old former Welsh international who made 99 league starts for City before he was sold to Spurs in 1979 for £275,000. brought in former Wales team-mate Neville Southall to assist him.
Originally, appointed as a Director of Football who had to move to Thanet as party of his contract, Yorath has since taken over as manager but currently his side lie in the bottom three of the top Ryman League Division.
Yorath has had management roles with Bradford City, Swansea, Welsh national side, Lebanon and an assistant role at Huddersfield Town.
A top bloke, who fondly remembers his time at Coventry and told City supporters in Ibiza in 2005 that he remembered all the words to the Sky Blue Song, Yorath has had a number of tragedies and personal problems in his life and all at Covsupport News Service wish him well.
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Scott Shearer is out for the rest of the season. The Wycombe keeper has an ankle injury.