Hanson, whose contract was set to expire in the summer, has penned a new deal that is scheduled to keep him at the Coral Windows Stadium until July 2017.
With Hanson continuing to play an integral part in Parkinson's plans following the club's promotion into League 1 last season, news of the striker's new deal is a sizeable boost to the football club.
Now that the 26 year-old has put pen to paper on his updated contract, Parkinson reckons City can help to make the forward even more of a potent force.
Parkinson said: "We're all very pleased that James has signed again with the football club. It is very important that we keep our best players here at the club.
"James' contract was due to expire in the summer and to lose a player of his quality on a free transfer wouldn't have been good for the club going forward.
"I think if James would have been a free transfer in the summer, there would have been a lot of teams interested.
"This is why we were so keen to get this deal done as promptly as we could.
"Contracts negotiations can take time but I think all parties are now happy with what I believe is a fair deal for him and for the club.
"He has done very well for the club since he's been here. He has been improving over the years and he's going to keep improving.
"We are going to do our best to help him fulfil his potential. We'll be working with him every day in training and after every game to help him get to his best."