Ahead of the 2010–11 season, Parnaby signed a one-year contract extension with Birmingham. He regained his fitness over pre-season, which he described as the best summer of his career. He made his first appearance of the season on 21 September 2010, in a 3–1 home win over Milton Keynes Dons in the third round of League Cup. Parnaby scored his first goal for Birmingham on 29 January 2011 in a 3–2 home win against Coventry City in the third round of FA Cup. He was an unused substitute as Birmingham won the 2010–11 League Cup, defeating Arsenal 2–1 at Wembley Stadium in the final. Following the club's relegation at the end of the 2010–11 season, Parnaby left when his contract expired.