This paper addresses the problem of transforming a single-input single-output discrete-time system into the extended observer form which comprises a linear observable component and a nonlinear injection term depending on the input, output and their forward shifts up to a finite order. The necessary and sufficient conditions for the existence of the extended observer form are provided in terms of vector fields. The algorithm is presented to find a parametrised state transformation necessary to transform the system into the extended observer form. The obtained results are applicable also in case of non-reversible systems.