Wolves manager Stale Solbakken is delighted to have agreed the deal with the player, who has been capped 24 times by Poland.
"Slawo is a player who can operate on both wings and had a very good first half to the season last year, setting up a lot of goals for Podolski," Solbakken told the club's official site.
"I know the quality that he can offer us including great acceleration. He is also not afraid, so while he may not be the biggest player in stature he is fearless which is one of his real strengths.
"I also think he will be looking for revenge for last season, and he is ready for a new challenge. I am delighted that new challenge is going to be with Wolves."
Solbakken worked with Peszko last season when they were both at Koln.