The Parole Board heard that Duffin was 12 weeks away from completing the Kia Marama programme - a specialist prison treatment programme for child sex offenders.
Paedophiles and rapists who undergo professional psychological treatment while behind bars are 30 per cent less likely to reoffend when released, studies say.
"I'm quite enjoying it. I've a real desire to make positive changes in my life," a composed shaven-headed Duffin, wearing a grey jersey, blue trackpants, sandals and socks, said yesterday.
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Paul Dally snatched Karla off her bicycle on May 26, 1989, and repeatedly raped and tortured her for 22 hours before burying her on a beach near Wellington.
Two years later Duffin and Hills drugged and raped a young girl -- not much older than Karla.
At sentencing, the late defence lawyer Greg King said the death of Duffin's daughter should be taken into account.
Last year when Duffin was denied parole, he told the board: "I must admit I may have used some things as an excuse."
Yesterday he did not seek release from prison, saying he wanted to first complete the Kia Marama programme.
"The board is pleased to hear that," said board panel member Jim Thomson.
On his eventual release, Duffin said he planned to return to the lower North Island where his family support network is.
"They've all supported me through this journey," Duffin said.
The hearing was told that Hills had completed her sentence and was living in the North Island.
Her current release conditions prevent her from having contact with Duffin.
"I wouldn't interfere with her progress or try and see her," Duffin said.
But he did admit that he would like to reunite with his partner of 30 years in the future.
"I'm quite happy to go on with my life alone, but I do know we've both made positive changes."
The board praised Duffin for his honesty and encouraged his rehabilitation.
He was declined parole and will be assessed again in just under 12 months.
Duffin quietly thanked the board before being led back into custody.
Timeline
June 2009 - Duffin and Hills are charged with five sex offences including sexual violation and rape, as well as 10 counts of supplying a Class C drug to a minor
October 2009 - Duffin and Hills are found guilty by a High Court jury of raping a 14-year-old girl. Duffin was also found guilty of indecent assault and an additional charge of sexual violation
January 2010 - Duffin was sentenced to nine years in prison, and Hills to seven years
September 2013 - Duffin was denied parole after he appeared before the Parole Board at Rimutaka Prison
August 19, 2014 - Duffin was again denied parole