The 24-year-old, who was called up during England's Six Nations campaign, is now committed to the club until 2010.
The in-form forward said: "There is so much quality in the squad that it was up to me to go out and earn a new contract.
"I am a pretty confident and determined individual but I had to reach a consistent level of performance and I feel I am doing that now on a regular basis.
"We have so many options available to us in the back row that I just didn't want to give my place up - there are obviously areas in my game I still need to improve but I am really pleased with the way I am playing at the moment and to sort this new contract out lets me concentrate on my rugby."
Narraway added: "We've done really well to establish ourselves at the top of the Premiership this season and get a home quarter-final in the Heineken Cup - the key over the next two months is to kick on and capitalise on the foundations we've laid."