The Australian was in the final few months of his contract and had been linked with a move back home.
But Rovers have fought off interest from NRL clubs to tie down Parcell until the end of the 2024 season.
The 29-year-old has revealed conversations with incoming head coach Willie Peters convinced him to stay on at Craven Park.
"The club’s been brilliant to me since I’ve been here," he said.
"The group of guys we have, it’s a joy coming to training and getting to play with them every week. I’m really enjoying where I’m at.
"I had a really good chat with Willie Peters the other day. It was good to speak to him on how he doesn’t want to change too much about my game and how he wants the team to play. He’ll have his spin on it and then add what he wants from the team.
"He really enjoys my running game and he wants to keep that going. That’s a big thing for me.
"I think that’s when I play my best and what I excel at. That’s where Tony (Smith) has been brilliant with me too.
"The last couple of years have been quite tough with Covid and not seeing the family for a while. But after speaking to Willie I was really excited by the chat and his vision for the team so that made my decision a lot easier."
Parcell originally joined Rovers on loan from Leeds Rhinos in 2019 and quickly earned a permanent deal.
A dynamic runner and a solid defender, he has been a standout performer during KR's resurgence.
Parcell joins Elliot Minchella and Kane Linnett in committing his future to the club, a lift for the Robins following Tony Smith's decision to leave Craven Park.
Chief executive Paul Lakin said: "Matt has played an integral part of our progress over the last couple of seasons and he’s an important player in our continued development.
"There was genuine NRL interest so we are delighted that Matt has committed to a further two years."