The 26-year-old shot-stopper has been on a five-month loan deal from Reading but has seen his first-team opportunities at Molineux limited due to a knee injury and the form of Wolves number one Wayne Hennessey.
But, after reviewing his contractual situation with the Premier League club, Stack feels he has chosen the right option.
"My contract at Reading is up at the end of the season. With Carl (Ikeme) fit now, and Wayne (Hennessey) doing so well, it's going to be really competitive, but I enjoy that and I'm not one to shirk a challenge," he said.
"I've got to work hard to win myself a permanent contract next season. I'm back on the pitches and I'll be spending this week working up to full training but my knee feels great."