The organisation announced that Midnight Train To Georgia writer Jim Weatherly and English songwriter Graham Gouldman also made the cut. Mark James, the writer of Always On My Mind - covered by Elvis Presley and Willie Nelson - rounds out the list of five inductees.
The new class beat out top acts that were also up for nomination, including Madonna, John Mellencamp, Sade, Nile Rodgers and Led Zeppelin's Jimmy Page and Robert Plant.
Davies, the Kinks lead singer and chief songwriter, penned the band's hits You Really Got Me, Tired Of Waiting For You and All Day And All Of The Night. He has also written for Van Halen and the Pretenders.
Scottish singer-songwriter Donovan's hits include Sunshine Superman, Mellow Yellow and Atlantis. Donovan has collaborated with Sir Paul McCartney, George Harrison, Ronnie Wood and Jeff Beck.
Both the Kinks and Donovan have been inducted into the Rock and Roll Hall of Fame.
The 45th annual Songwriters Hall of Fame gala will be held on June 12 at the New York Marriott Marquis.