Watson, 18, has settled into life at The Millbank Linnets Stadium very quickly and made a good impression in his half dozen appearances so far.
Linnets manager Michael Ellison said: "Niall’s been a pleasure to work with; he’s come with a great attitude and work ethic.
"He’s got great ability but the main thing is he has improved in every game in the short time he’s been with us. I’ve no doubt that will continue."
Watson made three first team appearances for Stanley last season and signed his first professional contract with them in the summer.
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