The Blues will pay his £170,000-a-week wages and they have the option to extend the deal for another 12 months in the summer.
At 31, Higuain’s best days are behind him and Sheth believes it’s only a short-term fix.
He thinks Chelsea are now ‘scouring the market’ for a permanent successor who can become their main man up front for years.
“Higuain, we know from the start, has been Sarri’s choice and this deal, if you look at the logistics of it, it effectively works for everyone,” he told the Transfer Talk podcast.
“Sarri gets his man, Chelsea aren’t committed to a long-term deal for big money so are minimising risk but that aside, the Higuain deal is something that Sarri has wanted for a long time.
“Despite the reservations from Granovskaia, I think it’s a win-win for everyone there.
“At the end of the season, if he performs terrifically well, it’s just an option to extend the loan for another 12 months.
“So whatever loan fees are involved as opposed to paying a permanent transfer fee for him.
“You can be sure that Chelsea are scouring the market right now for a long-term solution for their striker issues. Perhaps not this month but definitely for the summer, that’s for sure.”
Boss Sarri had been irked by Chelsea’s refusal to offer his over-30s – David Luiz and Cesc Fabregas – more than a one-year contract.
Fabregas has now left to join Monaco but Sheth doesn’t think the Higuain signing will spark a sudden change in transfer policy.
“People are calling this a change of policy. I don’t think it’s a change of policy as they have signed players over 30,” he said.
“Not many, admittedly, but the likes of Olivier Giroud and Samuel Eto’o have come in.
“It’s very interesting to see what’s happening at Chelsea just now.
“The Higuain deal does look like a compromise has been struck between Maurizio Sarri and the Chelsea board, most notably Marina Granovskaia.
“Make no mistake about this, there were reservations about bringing in a 31-year-old on the part Granovskaia, not least because of a resale value.
“Chelsea’s policy is normally to bring in younger players and if they do want to sell them on, try to make a profit out of them.”