In the summer, Wolves made the decision to acquire the services of the former Northampton Town stopper on a free transfer.
The 28-year-old became the club's third-choice stopper behind Jose Sa and Daniel Bentley, and the pecking order remains the same with King yet to make a senior outing for the Premier League outfit.
Nevertheless, Wolves have revealed that they have rewarded King for his professionalism with a deal until the end of 2026-27, with the option of a further year.
Speaking to the club's official website, sporting director Matt Hobbs said: "We're trying to create a culture, a togetherness within the training ground and the team, and the team is really connected to the fans, and part of creating that culture is generally the players not at the forefront of everything and nobody epitomises someone that drives a culture through his intensity in training every day, his work ethic and his personality more than Kingy.
"I can't underplay how important Kingy is to what we're doing here and that goes alongside his goalkeeping which is improving day in, day out. We've got three competitive goalkeepers who are driving each other on.
"They complement each other well. When Tommy [Doyle] came in, I talked about units of the pitch, having different personalities and different skillsets to balance.
"Goalkeepers are no different, but with goalkeepers, a large part of the balance is personality. We're lucky to have three really good goalkeepers who push each other on."
King, who has also spent recent spells with Newport County and Salford City, becomes the second Wolves player to pen fresh terms this month after Toti Gomes signed a long-term deal of his own last week.
However, earlier in the afternoon, Wolves revealed that they had been dealt a blow with Matheus Cunha being ruled out for the foreseeable future with a "significant" hamstring injury.