The 20-year-old Development Squad star has played 12 times for the League 1 outfit since his initial loan began in October, and has become a key part of Dean Smith’s side.
The Saddlers sit 13th in the table after 21 games, and are poised promisingly just four points adrift of the play-off places going into a tough home clash with Swindon Town on Boxing Day.
A dynamic midfielder with a creative spark, Cain scored his first professional goal for Walsall last month when he found the back of the net in the 2-2 draw with Tranmere Rovers in the Johnstone’s Paint Trophy, which the Saddlers eventually won 5-4 on penalties.
As well as gaining experience on loan with Mansfield Town last season, Cain made his first team debut for Leicester City earlier this season in a 1-0 Capital One Cup defeat to Shrewsbury Town back in August.