The Switzerland midfielder, 24, joined the Potters for a then club record £12m from Inter Milan in July and has scored three goals, with five assists, so far.
"We're really pleased with how he has come into games and had a positive impact," Hughes told BBC Radio Stoke.
"Arguably he's been on his best run of form in terms of end product."
Shaqiri has helped Stoke up to ninth in the Premier League and within four points of a potential Europa League place next season.
But a thigh injury forced him off after half an hour of their 2-1 defeat by Southampton and Hughes is not expecting him to be fit in time for Saturday's trip to Watford.
"There looked like there was a bit of damage near the top of his thigh," Hughes said.
"We don't know the extent of it and hopefully it's not bad but he's a major doubt."
Stoke captain Ryan Shawcross is also a doubt for Vicarage Road.
After six weeks out with a back injury, the 28-year-old returned to action against the Saints only to suffer another setback late in the game.
"He got knocked off balance and that's when all the pressure went through one side of his back," Hughes said.
"We're hopeful it's just a jarring and there's no damage. There's nothing you can do about it, it's just how Ryan's luck has gone of late."
Stoke City manager Mark Hughes is delighted with the efforts of summer signing Xherdan Shaqiri in his first Premier League season.