The England Under-21 goalkeeper has played an integral role in the Hornets' revival, which has seen them lose just two of their last nine league games to move six points clear of the relegation zone with a game in hand.
Loach told the club's official website: "It's a very tight league, we're very close to the finish line. A few more performances and results under our belts will guarantee our safety.
"The gaffer has got us going. If you look at the players out there, a few young and a few old, we're all footballers and we have the ability to mix it up."
There are some good teams in the Championship, this league doesn't get the respect it deserves. But if we keep getting the points then we'll be safe sooner or later."