MacDonald's initial month-long stay at the Pirelli Stadium has been prolonged until May 8, meaning the midfielder will not be eligible should Albion be involved in the npower League Two play-off final.
Gary Rowett's side are currently fifth in the table, two points off an automatic promotion spot and eight points ahead of eighth-placed Southend.
On extending the deal, Rowett said: "It's a massive boost for us to retain the services of Alex.
"He's a good player with real potential. He's been getting better and better for us and gives the side real balance on the right of midfield."
MacDonald, 22, has made five starts for Burton since joining the Staffordshire club.
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- Gary Rowett