Sheffield United Midfielder Joins Until End Of Season
"We have good players here so it's not going to be easy to get into the starting-11 straight away, I will have to work hard," he said.
"I know a few of the lads. I played with Junior Brown at Tranmere and Andy Mangan."
Wallace already knows a couple of players in the Town squad following his previous spell and his time at Tranmere Rovers.
"I'm delighted to be back and hopefully start playing some games," said Wallace.
"It was an easy decision (to come back to Shrewsbury). It's a good club and there's good people here.
"I've got more experience now. I was only a youth team player when I came to Shrewsbury from Everton.
"I've learned League One a lot more. It's a lot more physical than when I was younger.
"Micky Mellon has given me the chance to come and play football which I was delighted with.
"Sheffield United have got 42 pro players on their books and it didn't look like I was getting into their team.
"I had a few little injuries but I've been fit for four or five months and training every day, I just wasn't getting game time.
"I was playing reserve team football which isn't like first-team football."
And the Liverpool-born man is looking forward to getting work underway at Greenhous Meadow.
Wallace has also represented England at U19s and U20s level and began his career at Everton, appearing in a Europa League tie in 2009.
The 24-year-old, who had a loan spell at Shrewsbury in 2011, has featured seven times for the Blades this season.
Shrewsbury Town can confirm the loan signing of midfielder James Wallace from Sheffield United until the end of the season.