Todd, 19 next month, has put pen to paper on his second professional deal to keep him at Brunton Park until the summer of 2014.
Blues boss Greg Abbott told the club's official website: "Josh is a good player but he was a little bit unlucky last season.
"We know what he can do and we are delighted that he will be with us again next season.
"This gives him an opportunity to get back in June and do his work, and hopefully he will be pushing to make his mark."
Todd came through the youth ranks at Carlisle and signed his first contract last summer.
An injury hampered his progress during the early part of the season before he made his first-team debut in a 3-0 victory over Hartlepool on Boxing Day.