Davies was dismissed after two and a half seasons at the club due to poor relations with its board and a second failed attempt to rise to the Premiership.
The appointment marks McClaren’s return to English football since losing his role as England manager in 2007 due to the team’s failure to qualify for Euro 2008.
He has since had stints at Dutch club FC Twente and the Bundesliga’s Wolfsburg, which he left in February.
“I’m fully aware of fans’ expectations,” he said following his appointment. “We are going to do everything in our power to get back into the Premier League.”
Last week McClaren had been the frontrunner to replace Gerard Houllier at Aston Villa, but the opportunity was withdrawn following supporters’ discontent over the plan.