Charlton plc chairman Richard Murray told the club's website: "The team has made an encouraging start to the current season.
"We are demonstrating our confidence in Phil to achieve success."
Murray admits that Parkinson's position at the Valley came under intense scrutiny after the club suffered relegation from the Championship at the end of last season.
He said: "Our relegation to League One last season was a major disappointment for everyone connected with the club but, despite that disappointment, the board resisted the very real pressure that existed for change and demonstrated considerable faith in Phil.
"The board unanimously believes that Phil has all the right qualities to lead the club back to the Championship at the first attempt."
Parkinson, 41, is delighted to clear up his future as he approaches the first anniversary of his appointment, initially as caretaker manager, on November 22nd.
"I'm obviously very pleased. It's good news, and I suppose it can be taken as a sign that the club is progressing, but above all else I'm concentrating on continuing our good start to the season.
"I'm ambitious and driven to keep improving things at the club. We've done well so far, but we want to keep driving forward."
Meanwhile, Charlton have signed England youth international Elliot Omozusi on a short term deal until December 1st.
The right-back has trained with the Addicks throughout the week as Phil Parkinson searches for cover for the injured Frazer Richardson and Chris Solly.
Richardson suffered a thigh injury in last weekend's match against Gillingham, while Solly will be sidelined for around three months following a knee operation the same day.
Omozusi will go straight into the squad for the game against Carlisle United with Richardson expected to miss the match at Brunton Park.
Parkinson said: "We've signed Elliot for an initial month because we were left without a recognised right-back.
"Elliot is a good young player, and he has impressed us this week, in training and in the reserve game against Dagenham & Redbridge on Tuesday."
Although technically recruited on a month's loan from Fulham, England U19 international Omozusi is out of contract at Craven Cottage.
"The situation is a bit complicated because Fulham still hold his registration, so it's not a normal loan," Parkinson added.
"We've had to take him on a month contract, but we also have the option to make it permanent in January."