user.rb

class User < ActiveRecord::Base
  alias :devise_valid_password? :valid_password?

  def valid_password?(password)
    begin
      devise_valid_password?(password)
    rescue BCrypt::Errors::InvalidHash
      return false unless Digest::SHA1.hexdigest(password) == encrypted_password
      logger.info "User #{email} is using the old password hashing method, updating attribute."
      self.password = password
      true
    end
  end
end