The 36-year-old, who was due to come to the end of his contract at St Mary's next summer, has put pen to paper on terms that will keep him at the club until 2016.
"When I first came to this club, to say that I would have been here for this period of time is something that I would have dreamed about," Davis told the club's official website. "For that dream to have materialised and for me to be feeling good is something I am really, really pleased with.
"I've seen a few things, a few ups and downs, but since Nicola Cortese arrived with Markus Liebherr, the club has been on a journey. Little did I know the success, the drive and the constant improvements that would come once they got their teeth into the job."
Davis is currently the Saints' longest-serving player with 283 appearances.