Grujic has been sent out to the Championship promotion-chasers in a bid to gain first-team football experience.
“He's catching up and he's getting better," said Warnock.
“It's difficult for him to be flung straight in, with the second game being Manchester City.
“I think it's toughened him up being with us. When he first came into training, he left a little bit to be desired should we say.
“But you soon get into it with us – when you train as hard as we do, you want to be like that.
“And I think it's improved his game. The minimum requirement is effort because when you have ability like he has, it comes through on top. I think he's realised that early doors and wants to stay in the team.
“He wants to play and wants to go to the World Cup. He's in the window and has got 17 games to show it.
“I won't play him if he doesn't deserve to be in the team – I keep reading I've got to play him but all it is is that he have to pay more money if I don't. The club agreed to that so it's not my worry."