The Tigers are bidding to make an instant return to the Premier League and face Derby County tomorrow in the play-off semi-finals first leg.
Aston Villa will be in the Championship next season along with Newcastle United and Norwich City following Sunderland’s dramatic escape on Wednesday night.
All three relegated clubs will benefit from record parachute payments thanks to the new TV deal, leading Davies to believe it will not be too long before the second tier is regularly seeing players transferred for £15-20m.
“Look at who is coming down,” Davies told The Yorkshire Post. “Villa are relegated. I know Villa from my time there and just how big the club is. For that club to be in the Championship is crazy. In Newcastle, we are talking about a club that sells 55,000 seats per game.
“We want to be out of it. Next year will be tough and the year after that probably even tougher. The teams coming down in 2017 will come down with massive parachute payments. I can then see players in the Championship being bought for £15m or £20m. That would not surprise me.
“With that parachute payment, you can give it one really good go to get back. They will be able to sign who they want.”
For much of this season, City looked on course to bounce straight back from last season’s relegation. Steve Bruce’s men led the division as recently as February 27 and spent the best part of four months occupying an automatic promotion place.
However, an horrendous Spring that yielded just one win in eight games put paid to those hopes to leave Hull requiring the second chance of the play-offs to keep their dream alive.
Davies is one of several players to have committed their future to the club in recent weeks but Tom Huddlestone and Ahmed Elmohamady remain in the final few weeks of their own deals along with Sone Aluko, who is expected to leave regardless of whether City go up or not.
The futures of Huddlestone and Elmohamady do seem linked to where the Tigers ply their trade next season, while a failure to go up could see the likes of Robert Snodgrass, Abel Hernandez and Mohamed Diame attract interest from the Premier League.
Asked what is at stake over the next three weeks for the East Riding club, Davies said: “When a club doesn’t go up or goes down, there are usually going to be changes. People might want to leave and there will be bids for others as well.
“That happens in football. Even if we go up, there could be bids for certain players and some might want to leave anyway. You never know.
“But, if we get to the Premier League, I would hope we can give it a good go next season. I always say the best chance of going back up is that first season.
“Unfortunately, in football everyone wants to play at the top. If the club doesn’t get there then players aim to get there anyway.”
For now, the focus is on Derby and booking a third trip to Wembley in as many seasons.
“The main thing for us is to be ready,” said Davies. “They are the only team to do the double on us and will be confident.
“But, hopefully, we can cause them a mini-upset and get to the final. The play-offs are so unpredictable, form goes out the window along with results in the season.
“They are very nervy and very edgy games. Over two legs, it can hinge on that first goal in any of the matches.
“When I was at Birmingham, we played at Blackpool (in the first leg). Tom Ince scored a deflected goal off me. We then went to the second leg, went for it but conceded early and were 2-0 down early in the second half. We did get it back to 2-2 (but went out 3-2 on aggregate).
“That first goal is crucial in the play-offs. If it comes too early, you have a chance to come back, of course. But over two legs, that first goal can set the tone.”
City, of course, possess plenty of big-match experience with Davies one of a handful expected to start at the Ipro who played in the 2014 FA Cup final.
“You have to try and enjoy these games because you have to enjoy playing,” he added. “It is nervy when you think about it but, once under way, it is just another game.
“It is like the FA Cup final. When we went into that, the thought of playing Arsenal and the anxiety building up to it was more than the game itself. I think we proved that how we started. We were ready from that first moment.
“I am hoping we can draw on that experience in the play-offs. The others such as (Michael) Dawson and so on have also played in big games like the Champions League. That is an experience they can draw on.
“Hopefully, it can help us get through.”