The restricted free agent had four goals and 31 assists last season after posting 33 points in his rookie year. He had five points in 11 playoff games last season.
"I'm beyond excited to reach a new long-term deal to stay in St. Louis," Parayko said in a statement. "St. Louis has become my home, and this is where I want to be. I'm looking forward to the next five years and can't wait to get back on the ice in September."
Parayko, 24, finished his entry-level deal last season with a cap hit of $858,750.
The 6-foot-6 Parayko made the NHL All-Rookie team in 2015-16, was a member of Team North America in the 2016 World Cup and played for Canada in the World Championships in 2017.
"With Parayko and Alex (Pietrangelo), (Joel) Edmundson and (Jay Bouwmeester), our top-four is solidified," Blues general manager Doug Armstrong said in the statement. "And I think it can compete against any top-four in the league.
"There's a saying that an NHL defenseman doesn't really define himself until about 250 or 300 games," Armstrong added. "He's around 160, so there's still some growth there, some definition going into his game, but he's got all the tools to be a very good player over time, and we're very excited to have him part of our group."