"I'm delighted to be here. Wolves are in a good position to get into the play-offs, if not automatic promotion," Kyle told the club's official website.
"It's great to link up with Mick again. He got the best out of me when he was at Sunderland.
"In the season that we got to the semi-finals in the FA Cup and the play-offs, I got 16 goals. Mick believed in me and gave me the opportunity to go out and prove myself.
I'm here to work hard and fight for a place and do my bit for the team. It's going to be tough but it's a challenge I'm relishing."