Forest took the centre-half on a season-long loan at the start of the campaign after seeing him deemed surplus to requirements at the KC Stadium.
Their faith has been rewarded with a number of commanding displays, but his efforts have also attracted interest from outside of the City Ground.
It has been suggested that Hull will now look to recall Hobbs and offer him out to the highest bidder - in an effort to generate funds for a player who will be out of contract in the summer.
Reading are reported to be waiting in the wings, ready to scupper Forest's plans.
Davies, though, is convinced that Hobbs wants to stay on Trentside and believes Hull will enter into negotiations with Forest before looking elsewhere.
He said after the Reds' 1-1 draw away to Bolton Wanderers on Saturday: "I know the conversation we had with Jack Hobbs, the agents, Nottingham Forest and Hull in the summer.
"So I can tell you it is now down to the two clubs to sort out what needs sorting out.
"I mean Forest and Hull sorting it out. Not Reading, not Wigan, not Birmingham, not Charlton, or anyone else that is involved in this transfer deal.
"The player doesn't want to leave. He is very happy at the club and wants to stay.
"He is very clear in his mind what his position is. It is now down to the two clubs, pure and simple."