The extension is worth $15 million and includes $8.5 million guaranteed, agent Collin Roberts of Reign Sports told ESPN's Adam Schefter.
Miami values Davis' adaptability and versatility. He has moved from swing guard to starting right guard to starting right tackle over the last two years.
Davis spent most of the summer at right tackle, but he began taking snaps at left tackle this week after the Dolphins traded Laremy Tunsil.
On an offensive line full of new faces, Davis provides some stability. He played every offensive snap last season and, in 2017, became one of just five players in team history to start at three positions on the offensive line in a single season.
The extension also marks a steep rise for Davis, a 2015 undrafted free agent out of Idaho who joined Miami's practice squad in November 2016. He has a $645,000 base salary as an exclusive rights free agent this season, so the deal is a nice raise for him.
The Associated Press contributed to this report.