The defender has been on the Reds' books since the age of seven and will continue her journey after penning fresh terms at the AXA Melwood Training Centre.
Parry has appeared 49 times for the senior team to date, having debuted as a record-breaking teenager in 2020.
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"I'm delighted. This is exactly where I want to be," the 22-year-old told Liverpoolfc.com. "I'm just ready to push on and keep pushing and improving. I'm really excited for the new season.
"I'm Liverpool through and through and I wouldn't want it any other way. This is exactly where I want to be.
"For me, I just want to push on every day, be the best version of myself. And with the team around me, I feel like we're something special here."
After rising through the youth system, Parry became LFC Women's youngest-ever player at the time when she came on as a substitute in an FA Women's Championship clash with Coventry United Ladies, aged 16 years and 150 days.
She appeared four times the following season as Matt Beard's side secured promotion back to the Barclays Women's Super League.
The full-back then had a spell out on loan at Hibernian in Scotland before returning to the Reds to feature in 16 matches in 2023-24.
Her first Liverpool goal arrived in January 2025 during a Women's FA Cup fourth-round win away at West Ham United.
Parry, who has been capped by England at U23 level, was fielded nine times by Gareth Taylor last season.
