"He demonstrated what many have come to expect of New York City police officers, on duty or off; that is selfless dedication to duty," Kelly said Wednesday.
Davison was outside a Queens club on Sunday when he stepped in to stop an attack. A 22-year-old fired at him and missed. Davison returned fire and struck the shooter twice, the department said.
The suspect, identified by police as Stephon Allston, remains hospitalized and faces charges of attempted murder.
Kelly said the review of the case is still proceeding, but it appears the shooting was within department guidelines.
Davison, 44, was the first officer to fail a sobriety test - the same one used in drunken-driving stops - since the rule was put into place last September. All officers who kill or wound someone must be tested.
The mandate stemms from an internal NYPD review after the police shooting of Sean Bell, who was unarmed, outside of a strip club on his wedding day in 2006. One of the shooters, undercover at the club while investigating reports of prostitution, said he was drinking before the incident.
Kelly said the Breathalzyer test policy was never intended to require that an officer be disciplined, and the test is weighed as part of the overall circumstances.
"We said from the beginning that it would be possible to have cases where officers might test positive for alcohol use, and also be found to have taken appropriate police action. This is the first such case," Kelly said.
It wasn't clear if Allston had an attorney because he has not yet appeared in court. There was no answer at a phone number linked to an address provided by police.
