During the summer, the Terriers sealed a season-long loan deal for the FC Ingolstadt 04 defender, who has since gone on to make 15 appearances in the Premier League.
Hadergjonaj's increasing involvement in the first team has led to David Wagner activating a clause in the Swiss international's contract, and the Huddersfield boss says that the player is starting to show his potential.
The 46-year-old told the club's official website: "We knew that Flo would offer great competition for the right-back position and I think his first seven months at Huddersfield Town have shown why he is so highly-rated in Germany.
"As we expected, his characteristics have been perfect for our style of play and his performances have really improved game by game for us. He is also a great guy who has fitted into our dressing room perfectly."
Huddersfield currently sit in 15th place in the top-flight standings.