There are not specific rules for co-option and how a parish council fills its positions is down to the council in question.
When a councillor resigns, then the local authority has to be informed and an official notice published that requires 10 or more electors to act in order to have a formal election. If there is no formal request, then the parish council is open to fill the vacancies informally. Some councils will have a policy on how this is undertaken and some will ask their friends - it depends on how active the parish is - some parishes are permanently short of councillors as there is no interest in being involved.
Your question states that a formal election had taken place and it would seem that after this, there were still 2 places available. The parish council have a duty to fill these vacancies as soon as they can and therefore, it would seem that what you have stated is appropriate, if not as ideal as an openly democratic process.