Taylor, who initially joined Rovers just a day before their League One clash with Doncaster Rovers on 10th November, has so far managed to keep Shane Sherriff away from the left-back position and made five appearances for the club.
The extended loan deal means the 21-year old, who is yet to play for Blackburn, will stay with Tranmere over the hectic Christmas period until January, when Rovers will have the option of extending his stay on the Wirral until the end of the season.