Kane's second spell at Ewood Park was due to end after Rovers' home game against npower Championship relegation rivals Huddersfield on Tuesday night.
However, Blackburn boss Gary Bowyer will now have the 19-year-old full-back available for all five of the club's remaining fixtures as they battle to avoid to drop.
"We are delighted, he has been magnificent for us," Bowyer told the club's official website.
"The first time we brought him in you only had to see his debut at Wolves live on Sky, he took to it like he'd been with us all season.
"The level of his performances for a 19-year-old, in this fight that we are in, I can't praise him enough, he's a top lad.
"He brings a smile to people's faces and he's got a positivity about him that just spreads through the team. He's the type of player that this football club needs."