Diop, who marked his first Blues start with an equalising goal against Crystal Palace last weeked, has penned a new one month contract.
"I'm delighted that we have been able to extend Papa's deal into the New Year," Blues boss Lee Clark told the club's official website.
"I was absolutely delighted with his performance against Crystal Palace. He got stronger as the game went on and it was a typical goal of his.
"He's a big fella and he attacks the ball with aggression. People think he's just a big lad who intimidates the opposition, but he's a very good technician as well.
"Off the pitch he's great to have around the place and the lads have taken to him really quickly."