The 23-year-old, who scored five goals in the Malaysian Super League this season, was given the no.9 jersey, which was previously worn by current Kedah forward Paulo Rangel during his stint with the club last season.
He was the second Malaysian player to join a Thai side this month after Curran Ferns signed for Sukhothai FC from Felda United.
"I would like to thank the management of PKNP FC for releasing me on loan to Nakhon Ratchasima FC," he said on Monday prior to his departure to Thailand.
"It's been my dream to play abroad. Playing in the Thai league is a new challenge for me and I want to prove that a Malay like me is on par with other import players in terms of quality."
According to him, he was offered an initial five-month contract on loan, with an option to extend it if he performed well.
After joining PKNP in 2016, Shahrel helped them gain consecutive promotions from the FAM League to the Super League and was named the best local striker in last year's FAM National Football Awards.
His fine club form also saw him make his international debut for Malaysia in a match against Syria last year.
Nakhon Ratchasima, who won the league title in 2014, are currently 10th on the 18-team league table after 20 rounds, just three points above the relegation zone.