"I've had a fantastic time and I feel a real part of the promotion campaign," he told BBC Radio Shropshire.
Shrewsbury captain Ian Sharps added: "It's great news. He's a Steady Eddie, works and trains hard, and you can see he's played at a higher level."
Sadler, 25, joined Shrewsbury at the start of the season after failing to re-establish himself at Watford after injury - and has played 26 times so far for the Shropshire side.
"I feel fit physically and mentally, I feel optimistic for the future, and feel I'm proving my critics (at Watford) wrong," he said.
Source: BBC Sport