Davies' left arm has now healed just under six weeks after the defender broke it following an accidental collision with shot-stopper Jordan Pickford during the home game against Peterborough United back in August.
The centre half has been training this week with the rest of the squad in the build up to Saturday's Crewe game and he will now go up against Rory McArdle, Christopher Routis and Alan Sheehan for a place in the heart of City's defence.
Parkinson said: "Davo (Andrew Davies) is back and up for selection again. His arm is now healed, his six-week period off since the injury is just about up and the specialist is happy. Andrew has trained all this week with no problems.
"He will now go into contention for the game alongside the other defenders we have available to us.
"Alan Sheehan is back available for us as well now. He obviously didn't get his place in the team last weekend (vs Port Vale) but he has trained with real determination this week.
"That shows me that he is working hard to get his place in the team back.
"James Meredith has played well in his absence so who to possibly play at left back is going to be a tough call. It is a call we are going to have to make though, and it has to be the right one for this particular game."
While Davies and Sheehan are in contention for the Crewe fixture, Parkinson is less confident over the fitness of James Hanson for this weekend.
Hanson has been missing for City's last four league and cup games after suffering a tear in his thigh muscle during the warm up before the MK Dons League 1 fixture.
The Bantams chief hasn't completely ruled the striker out of the Crewe match but he is also wary of playing the giant forward and risking further injury if he isn't quite right.
Parkinson says City will continue to assess Hanson leading up to Saturday before making a late call regarding his selection.
He added: "With James, it is going to be a close call.
"He is getting close to full fitness but you always have those cautious thoughts in the back of your mind.
"Saturday is an important game, like they all are, but if we throw him out there and he gets injured again, we'd obviously regret it.
"We have to be sure he is right if he is going to play. We have enough good players in our squad to win without James."