The 24-year-old captained Swindon to the League Two title last season, but joined the Blues on loan following a public row with Paolo Di Canio.
Caddis dislocated his shoulder in only his third match for Clark's men, but has now started the last two games for the Championship club as they plot a route up the table.
Clark said: "Paul's vital to what I'm trying to achieve because he's got the DNA of the type of footballers I like to work with.
"He's got fantastic enthusiasm and he's very low maintenance around the football club.
"He's got great desire, he's technically very good and he's consistent.
"Paul is young and hungry and he's loving this opportunity to be at such a massive club in the Championship. He doesn't want to give it up without a fight and he actually wants to progress even further and go on to the next level.
"That's the type of DNA I want from players that represent the football club."