The move provides continuity and stability within the first-team group until a permanent head coach is appointed.
Davis will continue to be assisted by James Collins and Tony Roberts, while the club will look to extend the coaching team in the coming weeks to provide additional support.
Chairman Jeff Shi said: “In the short time Steve and his team have been in interim charge of the first-team, we have already seen improvements to the group, with the players responding well to their methods and the changes they have started to implement.
“Steve understands the culture and standards set at this club, and we want to give him and his team clarity on their positions and allow them the best possible opportunity for success.
“While there are no outstanding candidates to appoint on a permanent basis to the head coach position, we have complete faith in their ability and leadership to continue their roles into the World Cup break and new year.
“We have no plans to rush our search for a new permanent head coach and will not compromise in any way our approach to appointing the person we believe to be the perfect fit for our club, our squad and the role of head coach at Wolves.”
Davis and his team will now focus on Sunday’s Premier League fixture with Leicester City at Molineux and the remaining four games ahead of the FIFA World Cup, before continuing their work across the break in fixtures and into the new year.
