The 25-year-old has found chances at Molineux increasingly hard to come by, though, and spent two loan spells away from Wolves last season at Cardiff and Bristol City.
The attacker told the club's website: "I can't believe it has come up. I need games as well so it's perfect. This is where I started, it's great to be back.
"I know all about the club. I was here in what you could call the good old days and I left just as things started to go downhill.
"I was disappointed I never got a fair chance here. I thought I was sold too quickly. I understand what it was like back then, but it's good to be back and to have a chance to play in the first team properly.
"Every player wants to prove something and I'm no different. I feel I was let go too early and didn't get the chance to show fans what I could do."