Protip -- for backgrounds like this, did you know that they're made of tiles?
I took the very same background from The Spriter's Resource. If you want to extend it, instead of resizing, it is much more effective -- and visually pleasing -- to just add more tiles until you fill the screen space!
GraphicsGale lets you snap to a grid of 8x8 or 16x16 pixels so that's super easy to do. Took me less than two minutes. But you might need some time to get used to the program, although it's simple.
anyway, an exciting project!