Walters struck just 100 seconds into extra-time following a miserable, scoreless 90 minutes, and then added a second goal during the closing stages.
The Cardiff defence failed to track him from substitute Michael Tonge's inswinging corner, and Walters' header flew past stranded goalkeeper Tom Heaton.
And Heaton could do little to prevent Walters scoring again six minutes from time, as he finished expertly from close range.
Stoke manager Tony Pulis' decision to make 10 changes at times looked like backfiring as Championship promotion challengers Cardiff enjoyed the lion's share of possession in normal time.
The Welsh side had frantic injury-time penalty appeals waved away by referee Peter Walton after substitute Michael Chopra went down, before Walters condemned them to a third-round exit.
Neither Heaton nor his opposite number Thomas Sorensen were seriously threatened during normal time when poor skill levels and weak finishing combined to make it a forgettable tussle.
But at least the crowd of 13,600 were spared penalties as Stoke sealed a Molineux appointment with Mick McCarthy's men later this month.
Pulis recalled Ricardo Fuller and Jermaine Pennant, with Danny Higginbotham the solitary survivor from last weekend's 2-0 Premier League win against Bolton.
But Higginbotham lasted just 10 minutes before he limped off to be replaced by Tonge during a first half when neither side offered an attacking threat.
Cardiff manager Dave Jones handed a home debut to striker Jon Parkin - recently signed from Preston - who scored City's goal in a 1-1 draw at Championship promotion rivals Norwich three days ago.
But neither Craig Bellamy nor Jay Bothroyd were included, with Chopra named among the substitutes, and how Cardiff missed them.
Sorensen and Heaton both made comfortable saves from early shots on target, before Cardiff's Lee Naylor blazed a free-kick high over the crossbar.
And while Cardiff had most of the ball, there was little attacking menace from either side. After a 1-1 draw at Stoke 10 days ago, another tight game looked inevitable.
Stoke's Salif Diao was booked 12 minutes before half-time for a foul on Gavin Rae after Pennant's weaving run did not produce the finish it promised as his shot went well wide.
Cardiff still looked the most likely scorers, but Sorensen dealt comfortably with an increasing number of crosses from Chris Burke designed to find Parkin.
Stoke pressed as the interval approached, yet Cardiff comfortably snuffed them out and referee Walton's half-time whistle came as a welcome relief.
Stoke showed more attacking snap after the break, looking for Pennant to create a potential opening goal, although Cardiff had a threat of their own in Burke.
The visitors went close after 59 minutes when Ryan Shotton headed a Pennant corner inches over the bar, and then a Pennant free-kick went straight to Heaton in the middle of his goal.
Cardiff found themselves under sustained pressure for the first time, and Gabor Gyepes was cautioned after a foul on Walters before Jones sent on Chopra instead of Parkin with 25 minutes left.
Burke then shot just wide, but the drifted towards extra-time, the last thing both managers wanted, given their demanding league schedules.
Attention then switched to off the field following a flare-up in the Stoke supporters' end that saw at least one fan ejected from the ground.
Police and stewards moved in quickly to quell the flashpoint, and back on the pitch Stoke went close when substitute Tom Soares nudged the ball narrowly wide.
Andy Keogh had a late chance for Cardiff, his shot beating Sorensen before rising just over the bar, and the game went into extra-time, allowing Walters his chance to become Stoke's cup hero.