In what is only his second season as a professional Davies tops the charts at the Scarlets with the most tackles, jackals, carries and turnovers.
After being handed a professional Scarlets contract for 2014-15, Davies has been a revelation for the region. In 23 appearances at the end of his first season with the Scarlets, the young flanker had scored four tries and topped the list as the most successful ball winner at the breakdown. His courageous performances have won him numerous Man of the Match accolades in the last season and a half.
Davies was named Players' Player and Fans Player at the end of his breakthrough season and has scored nine tries in his 38 regional appearances to date.
Scarlets Head Coach Wayne Pivac said: "We're very pleased to see James extend his contract and remain here at the Scarlets for at least another two seasons.
"Statistically he's our top tackler, he's top of the breakdown list and he tops the chart with most carries; he's a very valuable player for us. We're obviously disappointed to be without him on the field for the next few months as he recovers from his foot injury but he'll no doubt make a return hungrier than ever for those all-important final few months of the season."
Commenting on the news Davies said: "I'm delighted to have signed an extension to my contract with the Scarlets. I'm looking forward to continuing my development with the Scarlets and continue to play with my mates again for the next couple of years. It will also be a great honour to play alongside Jon at the club.
"Things have been going well for me personally but also for the team. The injury is frustrating but I will be working hard on my recovery over the coming months to get back to fitness as quickly as possible.
"The goal is to make a return to finish the season off strongly with the Scarlets just as we have started but it's also every player's dream to play for their country. I've been fortunate enough to do that on the 7s circuit and cherish those experiences but would be delighted to be able to achieve the same in the 15-a-side game."
Davies' contract extension sees him join a strong pool of players already signed up for the 2016-17 season at Parc y Scarlets. Captain Ken Owens leads an impressive group of players who have committed their futures to Scarlets Rugby including Jake Ball, John Barclay, Rob Evans, Samson Lee, Aaron Shingler, Liam Williams, Aled Davies and Davies' older brother Jonathan who will return from France in the summer.
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