The 18-year-old spent nearly two months with League One side Northampton before Christmas and made his league debut for the Blades against Swansea on Saturday.
Local lad Walker turned in a professional display at right-back and admitted it was a "dream come true".
"I loved every second out there; I only live two minutes from the ground so it has been my dream to play for Sheffield United at the Lane in front of a massive crowd and I proved I could do it," Walker told the club's official website.
"It's a lot different being out there rather than in the stands, where you just shout things out and think a player should have done this or that. On the pitch you appreciate how hard it can be.
"I was nervous and that took something out of me. Going out on loan helped, although there is more pressure on you here."