The Newcastle midfielder arrived at the Crown Ground on an initial short-term deal but, having made six appearances so far this season, will now remain in Lancashire until January 2014.
"It's a massive boost for us," said the former Southampton and England striker.
"Michael played really well against Cardiff the other night. By his own high standards he'd had a couple of indifferent games before that but he looks back to his best now.
"With the way that Newcastle are helping us out, it was an absolute no-brainer for him to stay. He's a terrific kid, a good player and we just need to get some consistency into his performances now."