The 18-year-old’s new deal will keep him at Deepdale until at least the summer of 2016 and includes an option for a further 12 months.
The left back, who can also play at centre half, made his first team debut for North End in January 2013 against Coventry City at Deepdale.
Davies spent last season on loan at Sky Bet League Two side York City, where he made over 45 appearances as the Minstermen made the Play-Offs.
Speaking of his contract extension, Davies said: "I'm delighted to have extended my stay at Preston North End.
"It's a great Club and I cannot wait to get back now for pre-season training."
“It’s another challenge for me, I’m going to try and create some competition in the defence so hopefully I will be a bit more prepared this year to do that.
“As a club we need to look above the play-offs and try and get the automatic spots for sure, because we know that as a Club it is what we are capable of.”
Ben impressed so much in his time at York that he was awarded with the Young Player of the Year award, something he was delighted to have won.
“It was really pleasing, there were a few good players up for the award, so I was very pleased to have got it above them.
“The manager has obviously voted for me and I’m very grateful to him for playing me all year and then obviously getting the award on top of that.”
Ben joined Nigel Worthington’s side last summer, initially on a one-month loan but continued to shine and became a pivotal part of the team that reached the Play-Offs last season, making over 40 appearances. Despite losing out to Fleetwood Town in the semi-finals, the 18-year-old believes the experience has been crucial to his development.
“I’ve really enjoyed it, I think it was important to get out and get some experience of League football so I’ve enjoyed that and I’m very grateful to everyone that has made it happen.
“I think it is important to get a taste of everything that you can when you are out on loan, so obviously I got a taste of the bottom half of the table when we struggling down there at Christmas time.
“Then I got a taste of the Play-Offs which I hopefully won’t need at Preston next year but it could become important later on in my career.
“It has been crucial to get out and get some games you know, I think I have played 40 odd games, so that’s really helped me to be able to play for points each week rather than just to get game time, so that’s crucial to me and I’m very grateful.” He continued.
“It’s a massive achievement for me personally, I am really happy with that, I went there not expecting to play that many games, just with the aim to play as much as I could really and then it went from there.
“To play as many games as early in my career as I have done, I’m really happy with but I want to keep going at that rate and not ease off.”