Found in habitat, typically shabby (5)
I believe the answer is:
tatty
'shabby' is the definition.
(I know that shabby can be written as tatty)
'found in habitat typically' is the wordplay.
'found in' indicates a hidden word.
'TATTY' can be found hidden inside 'habitat typically'.
(Other definitions for tatty that I've seen before include "of inferior quality" , "Worn, scruffy" , "Worn, shabby (colloq.)" , "dishevelled" , "Sounds like King Edward in Scotland" .)