Dunne is expected to complete his £6m move to Villa providing he can agree a financial settlement with City where he has three years remaining of his contract.
Davies, who will see a specialist this week to determine whether he will require surgery, said: ''I am surprised that City are edging him (Dunne) out of the door.
''As much as they have made signings, Stephen Ireland has been one of their best players but, after him, Richard Dunne has to be up there.
''He has been a stalwart. He has played with a lot of different centre-halfs but he has always looked good. It is strange they are looking to let him go - but he would be a good addition here.
''There loss would be our gain because his experience is untold - but has still got enough in the tank to play for a few more years. He is an old style centre-half in being very solid and very strong.
''He is a decent reader of the game and wins a lot of headers but, at the same time, when the ball is at his feet, he can still pass it. He is a good footballer and his quality would add to our squad.''