Peacock-Farrell broke into Leeds’ senior squad during Steve Evans’ time in charge two seasons ago.
However, the youngster has dropped back down the pecking order at Elland Road more recently.
Peacock-Farrell did not feature at all for Leeds this season, with both Felix Wiedwald and Andy Lonergan ahead of him in the competition to play in goal for the Whites.
As a result, the 20-year-old stopper has been sent out on loan.
And Peacock-Farrell says that he is delighted to have the chance to play first-team football.
"I think that’s the aim for anyone my age," he said. "You want to be playing regularly. I got on, I had a game. The problem is - when you are a keeper and you are on the bench - you don’t get to come on for the last 10 minutes like an outfielder does. You have to wait for injuries and it just never happened for me while I was involved. I need to keep progressing and getting some experience and getting some exposure.
"Obviously, I have got a long contract at Leeds so I will be going back there whenever they decide to call me back. Personally, it's (about) coming here to get some games and helping this club out. Hopefully, it all goes well and it benefits all three parties."
Peacock-Farrell is expected to go straight into York’s starting line-up during his time with the non-league side.
The youngster is only set to spend one-month with York, when Leeds will have to re-assess the situation.
York’s next match comes against Leamington Spa in the National League North on Saturday.