The 23-year-old has made 53 appearances since arriving at Sixfields in the summer of 2008 after being released by Coventry City.
Manager Ian Sampson said: "He's a wide player with pace and gives us good attacking options down the left.
"He has the ability to take players on and to create things for us. He is an attacking threat.
He added: "Last season Liam was unfortunate to pick up an injury during pre-season.
"That hampered his progress, but if we can get a full pre-season into him this time, then that will be a big boost.
"The challenge for us and for Liam is to help him find the consistency required to deliver the quality of performance we know he is capable of, week in week out.
"If we can do that we will have a very good player on our hands."
Source: BBC Sport
Source: BBC Sport