
The official fee was not disclosed, but British media reported it was £4 million (US$4.80 million).
Davies joined Liverpool in 2021 from Preston North End when the club was suffering a defensive crisis with Virgil van Dijk, Joel Matip and Joe Gomez spending lengthy spells out injured and midfielder Fabinho drafted in as a makeshift centre back.
Davies signed for an initial fee of £500,000, British media reported at the time.
He played no official game for the Premier League club and went out on loan last season to Sheffield United.
“He is a strong defender with great qualities and will further add to our options in that area,” Rangers manager Giovanni van Bronckhorst said.
Rangers, Scottish Premiership champions in 2020-21, finished second behind Celtic last season and also lost the Europa League final to German side Eintracht Frankfurt.