The 32-year-old playmaker is signed through until the end of next season and has played in every single game since moving from Cronulla via the Warriors at the end of 2021.
He signed a mega-deal to partner with Tom Dearden in the halves and was brought in to impart valuable premiership-winning experience on the Cowboys' young group.
A 232-game NRL veteran, Townsend shot down rumours of a potential move on Tuesday.
"It's a little bit frustrating when you can see a journalist throw a hand grenade on a news program in prime time and create a bit of a mess," he said.
"My future is here in North Queensland. I'm contracted here at the moment and next season.
"I'm very happy. My family is very settled.
"It's a hand grenade, it means nothing and I don't really want to talk about it again to be honest."
The Cowboys, fresh off their first bye of the season, will have both their halves for a State of Origin-affected showdown at home with ladder-leading Penrith on Friday.
Dearden has been replaced as 18th man for Queensland by Gold Coast's AJ Brimson, which is a massive boost for a Cowboys side already without Maroons representatives Valentine Holmes, Murray Taulagi, Reuben Cotter and Jeremiah Nanai.
Hooker Reece Robson has earned a maiden berth for Brad Fittler's NSW side, with five Panthers players in the 19-man Blues squad.Â
Utility Jake Granville is expected to cover the hooking role against Ivan Cleary's side at Queensland Country Bank Stadium.
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