The 18-year-old Canadian played the final game of his 28-day loan on Tuesday but has now been given permission to face Port Vale on Sunday, with a deal until the end of the season likely.
Petrasso has made six appearances for Coventry since his February move, netting once in the 3-1 defeat at Tranmere.
"We're delighted to have Michael available for the game against Port Vale," City boss Steven Pressley told the club's official website. "He has really impressed us with his attitude and application since he joined us.
"He has worked hard in training and adapted to the system we play brilliantly. He has improved during his time with the club and his pace has proved to be a real asset to the side.
"We're hopeful the two clubs can agree a deal that allows Michael to stay with us until the end of the season."