Dixon, who will celebrate his 21st birthday on December 9, has put pen-to-paper on a deal to keep him at The Jakemans Stadium until January 5.
Sunderland have also granted Dixon permission to play for the Pilgrims in the FA Trophy — meaning he is eligible to face his former loan club Workington on Saturday.
Dixon has been an ever-present since his arrival in Lincolnshire — helping the Pilgrims record two victories and three draws so far in November.