Halliday's loan deal was due to expire after City's trip to Deepdale but the Bantams have now extended the Scot's stay at the Coral Windows Stadium until 17 January 2015.
Starting in central midfield, Halliday's corner set up Rory McArdle's opener during City's 2-1 over Preston this weekend.
Parkinson confirmed: "We've extended Andy's deal.
"I thought Andy (Halliday) and JK (Jason Kennedy) did really well in that midfield area today (Saturday). Central midfield is a key area and it is a big part of the pitch to play in but they dominated in there at times.
"Andy also got an assist with a great delivery from a corner."