The 28-year-old striker has signed in time to be face Notts County at Deepdale this weekend.
"I am looking forward to getting plenty of games under my belt. It has been a while since I played a few games in a row so hopefully I can do that here.
"I have been a bit unfortunate the first part of the season through injury, but hopefully the second half of the season I can do really well and play a lot of games for Preston and help push for promotion."
Burton-born Davies was a £300,000 signing by Bolton from Barnsley at this stage last year, but hasn't been able to nail down a regular place in the Trotters' side through form and injury.
He scored 4 goals in 20 appearances for the Whites.