A statement on the Plymouth website said the clubs had agreed 'to terminate Rory's time at Ipswich early and allow him to become a Pilgrim again.'
Fallon made four starts and two substitute appearances for the Tractor Boys, scoring one goal.
The Kiwi put Ipswich ahead at Coventry on New Year's Day before the home levelled after the break.
Meanwhile Ipswich's new manager Paul Jewell confirmed he is looking to bring in new faces to Portman Road with the ultimate aim being to develop a settled first team line-up.
"All good winning teams end up being settled teams," he told BBC Radio Suffolk.
"I'm still new to the job and still finding out about the players, but I'm hoping to bring in some players as well.
"I'm going to spend loads of time on the training ground this week.
"It's of paramount importance that we get some work into them, get a bit of belief."
Source: BBC Sport
Source: BBC Sport