The 26-year-old was due to play his last game of a one-month deal for Posh this weekend.
However, Town's manager Mick McCarthy has brought him back to Portman Road ahead of this Friday's clash with Barnsley.
Peterborough boss Darren Ferguson has been impressed by the player's fitness.
Ferguson told the Ipswich website: "Mick came to the Sheffield United game last week and has watched all of the DVDs involving Paul.
"You can definitely see he is a lot sharper and fitter and that is what Ipswich were looking for when they allowed him to come out on loan.
"Paul has done well for us but we knew there was a chance they would recall him earlier than the full month and that is what has happened."