The new deal will keep Davies at the club until 2012.
“I am really pleased that we could add another year to Kevin’s contract,” Bolton boss Gary Megson told the club’s official website.
“He has been absolutely 100 per cent since I arrived.
“He is a great leader on and off the pitch – a modern-day professional footballer setting a great example and he is fully committed to Bolton Wanderers.”
Davies joined Bolton on a free transfer from Southampton in 2003.
