Davies has previously suggested he would try to sign the full-back on a permanent basis, but he is now looking to agree a new loan deal for the 28-year-old.
"With regard to him (Shorey) I am waiting to find out what is happening, but we are hoping to extend the loan," said Davies.
"That depends on what Villa say. We will try to keep him for as long as we can.
"That conversation is still to take place, we will see what happens."
Forest maintained their promotion push by stretching their unbeaten run to 16 games against Coventry and Davies is keen to bolster his squad with three new signings in January.
He added: "I would like three good, proper signings, three top-drawer players.
"When you are developing a club, it is important to bring in permanent signings. They are a must.
"With regards to the long-term and what we are trying to achieve, we need to spend wisely on players who will not only help us get to where we want to be, but help us have longevity in the Premier League."
Coca Cola Ch'ship Promotion 09/10 Win Outright: Nott'm Forest 7/4