The 25-year-old, who joined the club from the Wildcats three years ago, has tied himself down to the club until the end of the 2018 season.
"It's a great honour to get a longer term stay here and I have enjoyed every minute at the club," Murphy told the club's official website. "I think we have a great side and when I was offered a chance to stay long term I took it immediately.
"We have finished top and third in the last two seasons and our challenge is to keep that consistency up and peak at the right time for the really big games.
"The squad strength here means you have to play well every week to stay in and we now have a number of genuinely promising younger players that the supporters will see more and more of in the next year or so challenging for slots in the seventeen which again can only be good for the team."
Murphy has scored 50 tries in 128 appearances for Huddersfield.