Shiels saw a specialist this week after being carried off on a stretcher during the 2-1 home defeat to Annan last weekend.
The 28-year-old has already withdrawn from Northern Ireland's squad for their World Cup qualifiers against Russia although Rangers manager Ally McCoist is hopeful he will not require surgery.
McCoist said: "Dean went down to London on Monday and it is not great news with regards his knee.
"Hopefully it does not require an operation. Without speaking to the specialist myself, which I haven't done, I have spoken to the doctor. It would be very surprising if Dean comes back this season.
"Again rather half-full than half-empty, it looks at this stage as if no surgery will be required."