Mir will be reunited with Wolves boss Nuno Espirito Santo, who he previously worked with at Valencia.
"It's a club that has already played in the Premier League. It's one of the biggest clubs in England and I'm really looking forward to my time with Wolves," Mir said in a statement.
"Nuno played a big part of my decision to come here. Wolves is a big project and it's an exciting challenge to be a part of it."
Mir will compete for a spot in the starting lineup with striker Leo Bonatini, who has scored 12 goals in the second division this season. Wolves are 12 points clear at the top of the league standings after 26 matches.
(Reporting by Hardik Vyas in Bengaluru; editing by Amlan Chakraborty)
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