The 18-year-old has been a target for several Premier League clubs but Spurs won the race to sign him 10 minutes before the transfer window closed.
Alli made his senior debut for the Dons as a 16-year-old against Cambridge in the FA Cup in 2012 and scored his first goal for the club in the replay.
He became a first team regular in the 2012/14 season, playing 37 times and scoring seven times, including a hat-trick in a 3-1 win over Notts County.
Alli has scored 12 goals this campaign, which is more than any other midfielder in England’s top four divisions, including another treble against Crewe.
“It was a difficult decision to leave a club that I’ve been with since I was a boy because I’ve loved every minute of my time here," Alli told MK Dons website.
"I’m really pleased that I’ve been given the opportunity to come back and finish this season – hopefully I can help us be successful.
"Nothing would make me happier than to help a club that’s given me so much reach the next level, which is where we belong. I owe so much to the manager, the chairman, the staff and players, as well as the fans, who have all been terrific with me from day one.
“I’m so excited about taking the next step in my career with a fantastic club like Tottenham Hotspur. It’s going to be a great challenge for me and it’s one that I’m really relishing. For now, though, my focus is solely on MK Dons and this Saturday’s game.”
Dons boss Karl Robinson told Sky Sports News HQ: "His stats speak for themselves. His goals, his assists - he's a remarkable footballer and we wish him all the look in the world.
"We respect the way Tottenham have handled themselves throughout all this - they've kept us informed and everyone has conducted themselves marvellously well.
“We are immensely proud of Dele. He is one of many young and talented players to have progressed through the youth system here, which proves that the chairman’s vision of providing local children with a step into professional football is paying off.
“We are delighted to have the opportunity to re-sign Dele and keep him with us for the rest of the season. Hopefully both he and us can share some more moments that will last a lifetime, before he moves on.”