After Morgan Schneiderlin and Jason Puncheon last week penned new deals, the 36-year-old goalkeeper has followed suit.
Davis is Southampton's longest-serving player and has made 283 appearances since joining from Sunderland six and a half years ago.
"When I first came to this club, to say that I would have been here for this period of time is something that I would have dreamed about," Davis told the club's official website, saintsfc.co.uk.
"For that dream to have materialised and for me to be feeling good is something I am really, really pleased with.
"I've seen a few things - a few ups and downs - but since Nicola Cortese arrived with Markus Liebherr, the club has been on a journey."
Davis' previous deal was due to expire at the end of next season and his new contract will take him through to his testimonial year.
The goalkeeper had been on the verge of a move to West Ham in 2009 when the club, relegated to League One, was financially ruined.
However, Davis was quick to commit his future to the club and helped secure back-to-back promotions.
"As club captain, Kelvin plays an extremely important role at Southampton," Saints manager Mauricio Pochettino said.
"His presence in the dressing room is second to none, and his experience has proved to be vitally important to the club as we look to achieve our aims.
"He has been a massive part of this club during his six and a half years here, and there are few things in football that he hasn't seen so far in his career.
"Every successful team needs to have characters and people like Kelvin, so I'm delighted that he has committed himself to the club for a further three and a half years."