"Habana has such pace and agility," says Davies, who won 46 caps for his country between 1966 and 1978 but never earned a victory over South Africa.
"My joy is to see Shane Williams perform the way he did last year, not only because I knew about all the skills he had but also because he had turned the whole prejudice of rugby now being for big, powerful people on it's head.
"It's not size that matters, it's talent. Shane has disproved other people's prejudices and he's done so in a spectacular way. I'm looking forward to the two of them (Habana and Williams) playing to a high standard on Saturday."
Halfpenny has enjoyed a spectacular rise to the heights of international rugby having only played a handful of games for Cardiff Blues this season. The 19-year-old's stunning early-season form has seen him thrust on to the big stage and Davies doesn't believe the latest Welsh sensation will disappoint.
"Warren Gatland believes that he deserves his place in the Welsh team. He should simply go out and prove that he deserves it. I've only seen him two or three times altogether, in the Junior World Cup and a couple of times at the beginning of the season, but he's a wonderful player.
"I think that we tend to play down youngsters and think that they haven't got the confidence. I was told earlier on that youngsters play without fear. A 19-year-old doesn't fear things and I'm sure that Halfpenny is not a man who will fear the opposition on Saturday."