"We are delighted to have extended Paul's loan here until the end of the season," said Cobblers boss Stuart Gray.
"Paul has done well for us in the games he's played and he was very unfortunate to get sent off against Colchester.
"He has got a lot of potential and I'm sure that there is a lot more still to come from him.
"He has settled in here really well and we are very grateful to Arsenal for allowing him to stay here until the end of the season."