"He is a nice lad but, as you know, we have four centre-backs in James Collins, Richard Dunne, Carlos Cuellar and Ciaran Clark," said the Frenchman.
"He was not getting enough time to play. I understand that."
Davies will emulate midfielder Craig Gardner and defender Liam Ridgewell as former Villa players plying their trade across the city.
The defender moved from West Brom to Villa in a £8m switch three years ago after an initial loan spell.
His form when in partnership with Martin Laursen was good enough for him to be named in the senior England squad for the friendly international against Germany in Berlin in November 2008.
But Davies's form dipped after Laursen was forced to hang up his boots during the summer of 2009.
He slipped down the pecking order after the arrival of Dunne and Collins 18 months ago and Cuellar and Clark have also moved ahead of him.
Blues boss Alex McLeish has been keen to sign a new centre-back since it became clear earlier this month Scott Dann would be out for the remainder of the campaign with a hamstring problem.
He has only three centre-backs now at his disposal in Roger Johnson, Martin Jiranek and Ridgewell, who has been operating primarily at left-back.
Davies will hope he can make the same impact as Ridgewell and Gardner, who were only fringe players at Villa but have become key components of the Blues side.
Gardner became a hero for City with the winner in the Carling Cup semi-final second leg triumph over West Ham in midweek.
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