The Rams, fighting for their lives at the foot of the Championship, were beaten 1-0 after Danny Hylton scored the only goal of the game on 67 minutes.
Davies, who came through the ranks with Town back in 2003, making 52 appearances, was sold to West Bromwich Albion for a then club record fee of £3m received by the Hatters.
He had spells at Aston Villa, Leicester, Birmingham and Hull, joining Derby in June 2017, and has been an ever-present for the Rams this term.
The County skipper had a chance to give his side the lead in the first half, volleying wide, but once Hylton found the net in the second period, it condemned County to a ninth defeat from 17 matches on the road this term, leaving them eight points from safety.
In possibly his last outing at Kenilworth Road, Davies was then applauded off by the home support after the full time whistle, as tweeting afterwards, he wrote: "There wasn’t much in the game today.
"A physical battle which seemed destined for 0-0.
"We had a couple of moments we were unable to capitalise on, and unfortunately they were able to do so with their opening.
"As ever we go again! Thanks for the support.
"I also have to mention the home fans, thanks for the reception and all the very best with the playoff push. #LTFC."