Drinkwater’s temporary stay at Turf Moor expires next week.
Dyche made this known on Friday ahead of his side’s FA CUP third-round clash against Peterborough on Saturday afternoon.
“Drinkwater is very understanding,” Dyche was quoted by Burnley’s official website as saying.
“He’s a good lad and I like him a lot and I think he’s a very good player. We couldn’t get him the game-time that he wanted and therefore he’s going to take his chance in January and see if something else comes up that can promise him more game-time.
“There’s no grudge to bear. We enjoyed his company and him being around but just couldn’t get enough football for him. It’s a professional decision from his point of view.
“There was a moment when we had injuries and he probably would have played but things happen in football.
“He has been a credit to himself with his professionalism, other than the incident; the way he has recovered from that and the way has looked after himself.
“He has tried to be part of the group. We just haven’t got him as much game-time as he wanted and he needs. I like him as a player and a character and I wish him well.”