The 20-year-old has been training with the Premier League club since the middle of January, with Sir Alex Ferguson monitoring the progress of the youngster, who can also play left-back.
"He's stayed there, we've agreed to extend that," Leicester boss Nigel Pearson told Press Association Sport.
"I have spoken to him a few times and Jeff is enjoying himself there, things are going well. I think it's great experience for the lad."
Schlupp has made five starts for the Foxes this season.