Arsenal are refusing to meet Swansea's valuation of Williams.
Davies, who flourished playing alongside his international skipper last season, believes the required fee should come as little surprise.
He said: "Last season I would say Ash was one of the best centre-halves in the Premier League, I cannot think of many who were better than him. The job he did was incredible.
"A price of £10million or more to sign him is completely justified.
"You see some of the money that gets spent in this league on players who are unproven in the Premier League. I think £10million is more than a fair price."