The 22-year-old joined the Cobblers in late January, making 19 starts during a successful spell that ultimately saw them secure their status in League Two.
Walker told Watford's official website: "I'm desperate to come back to Watford and show I deserve to be here.
"I want to get involved with the lads and get going again. I wish pre-season was starting tomorrow, I feel like I've been away too long and I want to get back involved.
"The loan went well for me. I played plenty of games and it was what I needed.
"Gary Johnson came in and he put his own stamp on things. It was an experience that will hopefully stand me in good stead in the future."
Source: PA
Source: PA