Duffy has spent the past three months on loan at Huish Park and has made 14 appearances for the Championship strugglers.
The 21-year-old's previous loan deal expired on Friday and he will be unavailable for Yeovil's game away to Huddersfield Town on Saturday.
However, Duffy will rejoin the Glovers next week when the transfer window reopens and will be in contention for the New Year's Day fixture with Watford.
He tweeted: "Yeovil for the rest of the season it is! Looking forward to the challenge ahead @ytfcofficial."
Duffy has made 10 appearances during his Everton career and Goodison Park boss Roberto Martinez discussed the benefits of the loan spell at Yeovil last month.
Martinez said: "The Championship is exactly what Shane needed. He's been performing at a real high standard."