Unveiling the plaque, in the room now named ''The Colin Davidson Room'' in front of family and friends, Mr Davidson said he was surprised by the honour.
''I'm very grateful for the acknowledgement and I feel a bit flattered as a result.''
Mr Davidson said he converted 2WD Massey Ferguson tractors to 4WD, an idea he had had for some time before he started doing it.
After getting in touch with Jack Johnstone, who started JJ Ltd with Abbey Jones in 1958 - and who was on site for the unveiling of the plaque, he started experimenting.
He fine-tuned the design, and more and more tractors were converted to 4WD in the 1960s, before Massey Ferguson started producing its own line of 4WD tractors in 1972.
He continued to work on tractors more than 50 years on, Mr Davidson said.