The midfielder, 19, is yet to make a first-team appearance for the Premier League club but enjoyed seven games on loan with Walsall earlier this season before being recalled by Mick McCarthy.
Town boss Graham Turner is pleased with the signing and hopes it will be the first of many on transfer deadline day.
"We`ve taken David Davis on a month`s loan from Wolves with a view to maybe extending it a little bit longer," he told Shrews` official website.
"He is a player I am pleased to get in and hopefully there will be others."
Source: PA
Source: PA