Fifa had initially banned the club from all transfer activity for two windows starting last summer, for violating rules on signing players 18 or younger.
The ban was pushed back to cover this January and next summer after Real Madrid lodged an appeal with the court of arbitration for sport (CAS).
Now the reigning European champions, who did not make any significant additions to their squad last summer, will only be restricted from signing new players for a single window after CAS partially upheld their appeal.
Real Madrid, who denied any wrongdoing, have also had their fine reduced from CHF 360,000 (£282,000) to CHF 240,000 (£188,00) after lodging an appeal with the court of arbitration for sport (CAS).
"The decision highlights the injustice of the original ban imposed by Fifa, although the club regrets that the CAS lacked the courage to revoke the ruling entirely," said the club in a statement.