Davies, 32, joined in 2015 and skippered the Staggies to League Cup final success in his debut season.
He lost the captaincy at the beginning of this term and was seeking a return to his native north-east of England, due to family matters.
But since then he has started all but one Premiership game for County.
"We are delighted that Andrew has chosen to extend his stay at the club," said County manager Jim McIntyre.
"Andrew's family are very settled and happy in the area now and it's a huge boost to have a player of his stature commit his future to the club for another two years.
"Since he arrived in Dingwall, Andrew has been first class for the team and probably one of the best and most consistent centre halves in the division."
Ross County defender Andrew Davies has signed a two-year contract extension, keeping him at the Dingwall club until the summer of 2019.