The 31-year-old midfielder was expected to be back in the Cottagers set-up soon after returning to training but the injury is more complicated than first thought.
Davies is still experiencing problems with the bone in his right knee and could now be out until next year.
"Simon has a pretty tough injury," said manager Martin Jol. "He will be out for the next couple of months."
When questioned further, the Dutchman added: "It is a technical thing. It could be four to five months."