The 20-year-old is currently on a three month loan spell at Bramhall Lane and scored a great goal in midweek as Sheffield United drew 1-1 with Leicester City.
Now Blackwell has now challenged Treacy to put in the performances up until the turn of the year.
"The option is there (to extend the deal), it is clear that he is lacking match fitness," Blackwell said. "He hasn't played a lot of football at first-team level."
"We will look at the long-term and if he does well between now and Christmas to possibly extend it."