"There is so much quality in the squad that it was up to me to go out and earn a new contract," Narraway said. "I am a pretty confident and determined individual but I had to reach a consistent level of performance and I feel I am doing that now on a regular basis.
"We have so many options available to us in the back row that I just didn't want to give my place up - there are obviously areas in my game I still need to improve but I am really pleased with the way I am playing at the moment and to sort this new contract out lets me concentrate on my rugby.
"We've done really well to establish ourselves at the top of the Premiership this season and get a home quarter-final in the Heineken Cup - the key over the next two months is to kick on and capitalize on the foundations we've laid."
Narraway joined Gloucester's Academy set-up from King's School, Worcester, and has also represented England Under-21s in both the Six Nations and World Championships. He has made 67 appearances in all competitions for Gloucester, including 23 so far this season and now has three England caps.
"If you are looking for the reasons why we are performing so well this season then you only have to look at the contributions made by guys like Luke, Alasdair Strokosch and Peter Buxton," said head coach Dean Ryan.
"Our side is built on their work ethic and desire to play well for the shirt. Luke is a very good footballer and is developing rapidly in other areas of the game. He has moved on from last year and is now performing consistently at a higher level - his England selection was due recognition of this.
"We are all delighted to have him signed up for another two years."