The 27-year-old attacking midfielder played in Germany for four years when he scored 33 goals in 140 appearances for Hertha Berlin, reports Xinhua.
"Due to our injury crisis we decided to get active on the transfer market again. Raffael will improve our opportunities in our offence," Schalke manager Horst Heldt said.
Raffael is well known for his speed, technique, goal scoring and provider abilities.
"It is an honour to wear Schalke's jersey and I am thrilled to return to the Bundesliga," Raffael Caetano Araujo said.
Raffael joined Dynamo Kyiv in 2012 and scored a goal in nine matches.
Schalke currently sit in seventh position in the Bundesliga standings, one point away from a UEFA Europe League play off spot.
