The local lad wanted to leave Goodison last summer, but stuck around and is now a regular in Ancelotti's line-up.
"At one point, I wanted to go on loan," said Davies.
"I am still developing and didn't want to just train and sit on the bench for a year.
"I want that experience of playing games.
"Me saying [in an Everton matchday programme interview in January 2020] that I want to learn how to dictate games, I am not going to do that by just training well every day.
"I need to be in the situation where I am in the game, dictating it and getting to understand it more.
"I went to speak to the manager and he gave me the reassurance that if I worked hard and carried on doing what I was, there would be opportunities for me.
"He thought it would be better to stay and help the squad and train well and improve that way.
"To hear that from him made me feel I was needed around the place and the two signings weren't going to give me no chance.
"If it had been anyone other than Carlo Ancelotti, I might have pushed more, dug my heels in a bit and said I want to go out and show you how good I am.
"But the manager has been great for me, I knew he would be true to his word and I respect him so much.
"I cracked on, as I always have done, did everything right by myself, got fitter and stronger and worked harder in training."
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