The 20-year-old, who can play either in defence or midfield, signed a two and a half year deal, keeping him at Deepdale until at least the summer of 2018.
The Burnley-born player, who came through the ranks at Old Trafford, spent the first half of the 2015/16 season on loan at Motherwell in the Scottish Premier League before joining PNE.
Grimshaw joined the Club in order to progress his career after spending is career to date with the Red Devils.
The versatile youngster has captained the Academy side at Manchester United, and is highly thought of within the game.
Grimshaw has also represented his country at U18s level, making two appearances during the 2012-13 season