Davies, 19, had been expecting to be part of the Swans' Under-21 squad this season, but he seized his chance after Taylor suffered a broken leg in September.
Taylor had made the left-back slot his own for club and country, but Davies has shown remarkable maturity and composure for one so young and has made the step up to Premier League and international level with little difficulty.
The teenager is set to win his third cap when Austria visit the Liberty Stadium on Wednesday, and Coleman has been amazed by the progress Davies has made in such a short time.
"Ben has done well, he's only 19," said the former Fulham and Coventry boss.
"Sometimes you get opportunities, sometimes you don't take them and sometimes you grab them with both hands and that's what Ben has done.
"He's grown in stature and confidence. Offensively he's getting better and better and he's got a great mentality and attitude to football and he's really done brilliantly."
Taylor, 23, could be forgiven for wondering how he will win his place back after watching his young protege make such an impression as he battles back to fitness.
But Coleman has made it clear the former Wrexham player's contribution has not been forgotten.
He said: "Neil has to get fit. He's worked tremendously hard, and I have had constant conversations with him because I know what it's like to be out for a long time and it's really hard.
"He just has to get fit and he can worry about where he's going to play after that.
"We shouldn't have an attitude of the King is dead, long live the King, because we must remember Neil Taylor is a quality player and he's shown that.
"Ben will know he's in good company when Neil gets fit, but all Neil has to focus on is getting himself ready and getting back.
"If he gets back before the end of the season then he's done well because it was a nasty injury."
Coleman has been forced to make one change from his initial squad selection following the weekend's club action.
Crystal Palace keeper Lewis Price is a withdrawal, so Jason Brown, without a club since recently leaving Aberdeen, is called up in his place.
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