McCarthy's new contract which sees him through to the end of the 2015 season is reward for an outstanding season that saw him clock up 50 league and cup appearances.
Paddy said: "I'm delighted, it was something that myself, the manager and the chairman have been talking about for some time so it's great to have it sorted. I thought we made good progression last year and speaking to the manager I know we're going to push on again this season. Everything's positive about the place, I'm very happy here and have a great relationship with everybody at the club."
Watch the full interview with Paddy on Palace Player from 12pm.