Walker joined the Steel City outfit from Dewsbury in 2013, and he has made 63 appearances since then for the Eagles.
“I’m delighted to stay at Sheffield and get my future sorted early for next season,” said Walker.
“I feel like I started the season a little slowly, as we probably did as a team, but I think I’ve been back to my best over the last few weeks and I’m playing with a lot of confidence.
“Tubbs [Mark Aston] has brought my game on considerably over the last couple of years. It’s good to be coached by a halfback; I’ve only ever been coached by forwards everywhere else I’ve been.”
Since Kyle Briggs joined the Eagles Walker has been turning out at loose forward, a position he feels suits him.
“Even as a halfback I never shied away from tackling; I feel it is a strong part of my game so I enjoy playing at loose forward,” he said.
“Something has just clicked between us all over the last few weeks and there has been a massive buzz at training and in the changing rooms.
“We probably didn’t adapt to well to the changes at the start of the season but you can just tell that the lads have picked up now.
“The playoffs are games you want to be playing in; it was a change for me coming to Sheffield and competing at the top end of the table having generally been involved in relegation battles before I arrived.
“The Grand Final is something we aim for; we want to get there and win it.”
Eagles head coach Mark Aston added: “We are delighted that Patch has decided to stay on for his third year with the club.
“He is a good honest player with outstanding kicking ability and has fitted in well here at Sheffield.”