"I obviously wasn't here at the start of the season when the Club went 15 games or so without a win but I'd say Ipswich is definitely going in the right direction now," he told the official club website.
"There is the nucleus of a very good team here and the Club is in a position to kick on and move forward next season. We have three games left and it's important to finish the season strongly and then push on from there."
Of his own future, Murphy added: "I've enjoyed it here, I've scored a few goals - should have scored a few more - and played in every game.
"I'll go back to Sunderland at the end of the season and have a holiday, meet up with family and friends and think about the future from there."