The Olympic silver medallist with the Great Britain 7s team endured a frustrating start to the PRO14 campaign after being forced to go under the knife to resolve a shoulder injury picked up in the opening game against the Southern Kings.
However, Davies is set for a return to action on Saturday against the Cheetahs and, having penned a new deal, he is looking forward to getting back into the thick of the action.
He said: "It has been a frustrating start to the season for me on a personal note having to watch from the sidelines but I am pleased to have signed a contract extension with the Scarlets.
"It's great to get back into the routine of things and back into side that's doing well. We want to carry on the momentum from last year and positive start to this season towards the money end of the season."