The UK Parliament was by all means a two-party system, with Labour in one side and the Tories in the other. If anything it has become more diverse post-Brexit. Compare that with the Bundestag, where no party has more than a quarter of the seats.

There were 7 major political parties in Germany in 1933, so I’m unsure that there is overwhelming evidence that more than 2 political parties is protective against extremism.