Phil Brown said he will now "look elsewhere" for defensive reinforcements.
Mills should be fit and available to join City for the final two months of the season. Although transfers for this season must be completed by the end of January, loan deals can still go through until 23rd March, and emergency loans beyond that date.
Meanwhile, Brown says he will only move to bring former City midfielder Adam Bolder back to the club if Derby accept to let him go on a free transfer.