The 25-year-old had two years remaining on his previous contract but has signed improved terms after impressing new Wolves manager Nuno Espirito Santo during the first two months of the campaign.
The Irishman is one of the longest-serving players at the Midlands side, having joined from Bohemians in 2010, and has been an ever-present so far this term to help Wolves to second in the Championship table.
"We started negotiations at the back end of last season but we weren't playing that well so it was decided to leave it," Doherty told the Wolves website. "There was then a change of head coach and you are never sure if you are going to be involved. He told me I was in his plans and started the season quite well.
"It shows great faith in me from him and the club to give me a new deal when I still had two years remaining. People might think a four year deal brings a bit of comfort but no chance.
"This is a really big season for us. We are joint top at the moment and it is an exciting time for the team in terms of potential and what we are capable of. We are looking to try and get promoted, and I want to play as many games as possible to help get to the Premier League."
Doherty made his 150th league appearance for the club in their 2-1 win over Barnsley on Saturday.