Wolves also have the option of extending the striker's deal by a further year, which could see him remain at Molineux until 2016.
"That's me now, I'm settled. I'm moving into a new house in Wolverhampton tomorrow and from now on I can concentrate on my football and try to help Wolves have a successful season," said the 22-year-old, who spent last season on loan at Hibernian and netted 20 league goals to come second in the SPL's scoring charts.
"The fans have been great with me in the games I have played in pre-season and hopefully I can now repay that by scoring goals."
Wolves are in action in the Capital One Cup tonight against Morecambe and you can follow live text coverage of the match here on Sports Mole from 7pm.