The 24-year-old, signed in January for the rest of the season from Sheffield United, was injured in the 2-1 home defeat by Southend on 2 February.
"We've seen what a talent the lad is," Town boss Micky Mellon told BBC Sport.
"But he goes in for a tackle and he's picked up an injury."
Mellon added: "He's gutted as he came here to play and to get himself going again."
Wallace, who came on as substitute in Town's fourth round win over Sheffield Wednesday, has been limited by injuries to just 20 appearances for the Blades since signing from Tranmere Rovers in June 2014.
The former Everton trainee is on his second loan at Shrewsbury, having spent two months on loan in Shropshire during the 2011-12 season when he was still on the books at Goodison Park.
Shrewsbury have won just once in six league matches since the turn of the year, going into Saturday's key away game against fellow strugglers Blackpool, one of Town manager Micky Mellon's former clubs.
Mellon has the option of bringing in Elliot Grandin for his debut against his former club, the former Blackpool winger having signed last week until the end of the season.
It is the final time Shrewsbury will be in action before the meeting with Louis van Gaal's United.
The League One club have so far sold 6,000 tickets for their tie against the 11-times FA Cup winners on Monday, 22 February (19:45 GMT).
On-loan Shrewsbury Town midfielder James Wallace has been forced out of action with a knee injury that will cause him to miss the FA Cup fifth-round tie with Manchester United.