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.
Former treasury minister Charles Parkinson is returning to the States of Guernsey after winning the St Peter Port North by-election.