Davies' current deal expired this summer but he has agreed to stay on, with defender Sam Ricketts also agreeing a two-year extension as manager Owen Coyle prepares his side for their npower Championship campaign.
Midfielder Nigel Reo-Coker has activated a release clause in his contract while a further 11 players have all been released after their deals ran out.
Gretar Steinsson, Paul Robinson, Sean Davis, Robbie Blake, Ricardo Gardner, Ivan Klasnic, Mark Connolly, Tope Obadeyi, Rhys Bennett, Dino Fazlic and Tom Eckersley are those who have left, while Tuncay Sanli, Dedryck Boyata and Ryo Miyaichi have all returned to their respective parent clubs after loan spells.
In a statement Bolton said discussions were continuing with goalkeeper Jussi Jaaskelainen, deposed as number one by Adam Bogdan, and Zat Knight over their contracts.
"I was clear with Nigel. I asked him straight away whether he wanted to stay and be a part of what we are going to do next season," Coyle said in a statement.
"He was honest and up front with us, because that is the type of man he is, and said that he wanted to exercise the clause in his contract, and so we wish him well.
"I would also like to thank the players that are leaving the club for their work at Bolton. We wish them all well.
"One of those is Ricardo Gardner, who has been with the football club for 14 years.
"He has offered incredible service to Bolton and I'd like to personally thank him for all of his efforts, particularly during the time I have worked with him."