Blyth, 21, arrived at Sixfields on a one-month deal towards the beginning of August and has found the net twice in six appearances during his stay.
That has convinced Cobblers boss Aidy Boothroyd to keep hold of his services for a maximum three-month period.
"Jacob has had a good month with us and I'm really pleased we've managed to extend his loan," Boothroyd told the club's official website.
"He's scored two goals and he probably could have had five or six.
"He's brave and he wants to put his head on things and what we've got to do is provide him and the other strikers with the ammunition to score more goals."
Blyth will now remain with League Two Northampton until their clash at Plymouth Argyle on November 2.