The 20-year-old former Northampton Town player moved from his home town club to Tyneside last summer, but has so far made just four substitute appearances.
Toney, who was close to joining Shrewsbury's neighbours Wolves in December 2014, spent time last season on loan in League One at Barnsley.
He is likely to make his debut in the League Cup at home to Huddersfield.
"I'm looking to get some goals under my belt, become a better player and help Shrewsbury get higher up the league," Toney told BBC Radio Shropshire.
Shrewsbury, who only just avoided League One relegation last season, began the new campaign with a 1-0 home defeat by MK Dons on Saturday.