He was elected with 571 votes, ahead of Michael Henderson and David Noakes with 184 and 109 votes respectively.
A total of 883 (27%) of the 3,220 registered voters turned out with four blank papers and 15 spoilt papers.
Mr Parkinson will serve for four months and said there were "very important decisions" to be made in that time.
Before the by-election some criticism was made of the Â£50,000 cost, a fifth of a general election, for the short term of the office - the by-election had to be held under the island's Reform Law.
Mr Parkinson said: "The voters of St Peter Port North deserve to be represented every bit as strongly as the voters of any other district.
"These next four months will set the scene for the general election, it will help to define the issues on which the general election will be fought."
Mr Parkinson served in the States from 2004-2012 and was the minister of Treasury of Resources from 2008-2012.
He previously stood in the South East district and said he had "enjoyed biking around getting to know the St Peter Port North district better" while campaigning.
He campaigned with three key policies; diversifying the economy, reforming the corporate tax system and solving the affordable housing crisis.
His term of office will end at the general election on 27 April.
The by-election was called after the death of Deputy Martin Storey in July.

The suspected green mamba was found on a ship that had docked in Aberdeen from west Africa last month.
The snake died after it was placed in a freezer by the animal charity after attempts to rehome it with specialist reptile keepers failed.
The snake was later identified as a harmless green tree snake.
Police Scotland said a complaint was under consideration.
Scottish SPCA Ch Supt Mike Flynn said: "We were called out after a green snake arrived in Aberdeen on a boat from Africa.
"The snake was thought to be a green mamba, one of the deadliest snakes in the world. The snake was taken by police escort to our Aberdeenshire animal rescue and rehoming centre.
"Sadly the snake, which staff genuinely believed to be a green mamba, had to be put to sleep after our attempts to rehome it to specialist reptile keepers were unsuccessful."
He added: "We could not keep the snake in our centre due to severe health and safety concerns, as the closest anti-venom is held in Bedford. Green mambas also require a Dangerous Wild Animal Licence which the society does not have.
"The safety of our staff and the public is paramount and as such the snake was placed in a freezer where it passed away.
"The Scottish SPCA is proud of its policy not put healthy animals to sleep. Animals are only put to sleep on veterinary advice if they are too ill or too aggressive to be rehomed, or where we are legally required to do so.
"The decision to euthanise the snake was not taken lightly. Unfortunately, the snake has since been identified as a harmless green tree snake. This has been an honest mistake on the society's part as we genuinely believed this was an extremely deadly snake."
The western green mamba feeds on small animals and rodents and is mainly found in the coastal tropical rainforests of western Africa.
Experts say its bite can be fatal in as little as 30 minutes.
Former treasury minister Charles Parkinson is returning to the States of Guernsey after winning the St Peter Port North by-election.
[NEXT_CONCEPT]
A complaint about the Scottish SPCA putting what was thought to be one of the world's most deadly snakes to sleep is being investigated by police.