The 20-year-old was asked to fill in at left-back after Neil Taylor broke his ankle last September, and he has played in almost every game since and made his international debut
Taylor broke and dislocated his ankle last September, and Davies was called upon by manager Michael Laudrup to take his place.
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And Davies, who also made his international debut for Wales, told the club's official website: "It's been a great season.
"Over the next few weeks we'll look back and realise we've had a really special season. We have to be happy with all that we've achieved.
"I feel very proud when I look back on the last season, but I have to look forward now. I've got to keep doing what I'm doing and become a better player."
Taylor, the man he deputised for, is fit again and raring to go, but Davies insists the increased squad competition will spur him on rather than intimidating him.
He added: "It's going to be a real competition between the two of us. It's something the two of us are really looking forward to.
"It will force the two of us to play at our best every week. It's a good thing that we're competing on an international level as well."