Coady will now remain at Bramall Lane until 24 February.
Blades boss Niel Clough told sufc.co.uk; "We have extended the loan of Conor and will see how things progress. Obviously the lad wants to be playing regularly, so we thought in the first instance it would be wise to sort out the short term.
"He has started a lot of games since we arrived, he does a lot of good things, but as you would expect from a young player, has areas of his games to work on. Conor is such a bright lad, though; he has a real willingness to learn and improve and always has a smile on his face. He will certainly have benefited from this loan and he has proved to be a useful performer to have in our squad too."