We propose a modified configuration of the nonlinear-optical loop mirror (NOLM) unit by introducing the polarization-effect optimization (PE) into a nonlinear Sagnac interferometer through a polarization-maintaining optical coupler, enabling significant extension of the regeneration region (RR) of the all-optical multi-level amplitude regenerator. We carry out the thoughtful investigations on this PE-NOLM subsystem, and reveal the collaboration mechanism between the Kerr nonlinearity and the PE effect in only one unit. Moreover, the proof-of-concept experiment and its theoretical discussion of multiple-level operation have been performed, observing the 188% enhancement on the RR extending and the consequent 4.5 dB signal-to-noise ratio (SNR) improvement for a 4-level pulse amplitude modulated (PAM4) signal compared to the conventional NOLM scheme.