The 20-year-old centre-back has featured in every single match since joining the club and there is a 24-hour recall in the youth loan should the Premier League side decide they need the defender.
"Michael has been superb for us and I'd like to thank Reading for allowing us to keep him," manager Mark Yates told the club's official website.
"He is a good young defender and he has done really well since being here. He's a young player but he has a big future and it was important that we were able to keep hold of him until the end of the season.
Hector would also be available for the League Two play-offs should the Robins reach them.