The 19-year-old becomes manager John McGlynn’s 15th signing of the summer.
"Conor is a winger, and he's one that Allan Fraser watched towards the end of last season and he caught his eye, so we've followed him since then," manager John McGlynn said.
"He's been doing really well in pre-season with Wolves. He scored a couple of goals against Burnley, which is great from his point of view.
"He's a skilful player that will take opposition players on in one vs one situations, and we feel he's someone who will complement the team.
"He's coming in to push for starts and to try to make a name for himself, like a lot of the players we've brought in in these positions have done.
"He's one that we've been doing a good bit of work on. We're delighted to get him, we're looking forward to working with him, and we welcome him to the football club."
McLeod joined Wolves’ academy at six and signed his first professional contract in December 2023.
He has made 58 appearances in the U18 Premier League, scoring 13 goals and providing four assists.
The youngster has also featured regularly for Wolves’ U21 side and earned one England U16 cap.
Although yet to make his senior debut, McLeod will now gain valuable first-team experience with Falkirk.