Murphy's contract was to end at the end of the 2008–09 season and there was much speculation as to where his future lay; many reports suggested that he would be moving to a much bigger club to gain international football for Ireland. This speculation was ended when he signed a one-year contract extension with Scunthorpe, extendable to 2011 if the Iron remained in the Championship. He told local newspapers that he signed the new deal because "He owed the club for all it has done for him". He was selected as a member of the League One team of the year for 2008–09.