The 26-year-old, who began his career at Boro, made his second debut for the club in Saturday's 3-2 win at Millwall after joining until the end of the season from Stoke.
Davies has found first-team football hard to come by at the Britannia Stadium since switching from Southampton in 2008, making only four appearances and spending loan stints at Preston, Sheffield United and Walsall.
"I always felt I've got the ability if someone just gives me that chance," Davies told the club's official website. "(Middlesbrough boss) Tony Mowbray has brought me in and given me that opportunity.
"I told him the type of player I was, I train the same as I play. When I was here (training with the club in pre-season) I was just praying that he took me and gave me a chance because I feel I haven't been given a chance to the last three or four years.
"To be out there doing what I love - and that's playing football - is just fantastic. I just want to keep playing. I've got a lot of friends here, the coach Mark Proctor had me here as a kid and I just want to do well for everyone. That's what I'm here to do and I will do it."
Source: PA
Source: PA