Reds owner Marge Schott and outfielder Eric Davis, who complained publicly that the team ignored him after his World Series injury in Oakland, emerged from a private meeting yesterday in Cincinnati to say they have begun settling the dispute.

Davis, appearing with Schott in a news conference at his suburban Cincinnati home, told reporters he will still need some time to put the dispute behind him.

"It's something that is going to take time," he said. "This is a big step. It eased my mind a little bit. I have a job to do. Once the 1991 season starts, this is going to be behind me."

He paid for his flight back to Cincinnati in a specially equipped plane with medical personnel aboard, then complained that the Reds had not returned his calls and had ignored him. Davis, who was released Tuesday from a Cincinnati hospital to continue recuperating at home, complained that he was stuck with the $15,000 bill for the special flight.

He has two years left on a three-year contract that pays him at least $3 million a season. He backed off his earlier statement that, were he a free agent, he would not sign with the Reds because of the dispute.

"I just felt so bad about this whole thing, listening to all this monkey business," Schott said, sitting on a couch next to Davis. "We're here to put an end to this thing. I've been close to this guy for five years. I don't want anything like this to happen again," she said, breaking into tears and hugging Davis.

She declined to tell reporters whether she would pay the bill for the return flight. Morris Goes to Arbitration

Right-hander Jack Morris has accepted the Tigers' offer of salary arbitration. But his agent says Morris likely will be made a free agent as a result of an arbitrator's ruling that found baseball owners guilty of restricting the free agent market after the 1987 season. Morris, 35, was 15-18 with a 4.51 ERA last season, his 14th with the Tigers. . . .

The last four players eligible for free agency filed, and catcher Terry Kennedy agreed to a $500,000 one-year contract with the Giants, leaving the free agent total at a record 96.

Kennedy, who hit .277 this season, filed for free agency Thursday after the Giants declined to exercise a $1 million option and instead gave him a $75,000 buyout. He made $850,000 in 1990. He can made an additional $100,000 next season in bonuses.

Players filing today were A's pitcher Scott Sanderson, Dodgers utility man Mickey Hatcher, Padres third baseman Mike Pagliarulo and Giants pitcher Mark Thurmond. . . .

George Bell says he won't play for the Blue Jays again if it means becoming the club's full-time designated hitter. And he doesn't mind going elsewhere.

Pat Gillick, the Blue Jays' vice-president, said he will try to re-sign Bell only as a full-time DH.