A text file can be loaded in a notebook cell with the magic command %load.

If you execute a cell containing:

%load filename.py
the content of filename.py will be loaded in the next cell. You can edit and execute it as usual.

To save the cell content back into a file add the cell-magic %%writefile filename.py at the beginning of the cell and run it. Beware that if a file with the same name already exists it will be silently overwritten.