The striker's previous deal was set to expire at the end of the 2014/15 season but he will now remain at Meadow Lane until the summer of 2016.
Murray joined the Magpies from Ipswich a year ago and went on to make a significant impact under manager Shaun Derry.
He scored nine goals in 16 starts in all competitions, including seven in the league to help Notts preserve their League One status.
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