The 28-year-old is currently at npower Championship side Preston, where he will stay until mid-January after agreeing to an additional month's loan.
However, the Potters have no intention of allowing the player to leave permanently and have moved to keep Pugh for longer.
"It is important we look after the players who helped start off what we have achieved over the past three years and Danny is one of them," manager Tony Pulis told stokecityfc.com.
"Although he has found it difficult to command a place in the squad this season he is an excellent professional and every club needs players with his qualities who can be relied upon to come in and do a good job if required.
"The impact he has made at Preston is evidence of that and he will benefit from playing regular first-team football."
Source: PA
Source: PA