The Toffees announced a similar deal for Donkor in January, but an ankle injury led to him spending much of his time on Merseyside on the sidelines.
However, Everton have returned for the youngster and he will again take his place in the Under-23 squad at Goodison Park.
The 19-year-old told the club's official website: "I'm very happy to be back. I'm looking forward to pre-season to show my teammates and the fans that it was the right decision for the club to re-sign me. I'm very proud to be here and I want to show my best performances.
"I started very well here last season but the ankle injury was a big disappointment. I was out for about eight weeks and I had to go back to Germany and do all my treatment. But I got fit again quickly and now I'm feeling better than before. I'm feeling at 100%."
Donkor is yet to make a first-team appearance for either Wolfsburg or Everton.