Togwell, 25, was able to leave on a free transfer this summer if he wished but has agreed to remain with the Iron until the summer of 2012, with the club having the option of extending it for a further season.
"It was a difficult decision because there was interest from other clubs but I felt this was the best deal for me," he told the club's official website.
"Last year I started out of the team and I want to make sure that this year I'm in it for every game."
He has made 98 appearances for Scunthorpe, scoring six goals, having signed from Barnsley in the summer of 2008.