The 22-year-old moved to Molineux from Dundee in January 2011 but spent two seasons on loan at Hibernian and only made his first Wolves appearance in last weekend's goalless draw at Preston.
Griffiths, who has won two Scotland caps, scored 28 goals in 44 appearances for Hibs last season and Wolves boss Kenny Jackett hopes he can fire the club to promotion back to the Championship.
"Following on from a very successful loan spell in Scotland with Hibernian, Leigh has come back and had an impressive pre-season," said Jackett.
"I am very pleased that he has signed a new contract committing his future to the club.
"We hope that he can now continue his good goalscoring form heading into the season."
Griffiths had been linked with a permanent move back to Scotland but he is delighted to be staying at Wolves for the foreseeable future.
"The gaffer has been great with me from day one, he has seen what I can do and in return I have been rewarded with a new contract," said Griffiths.
"As a player it always helps you settle when you know where you're going to be playing for the foreseeable future.
"That's me now, I'm settled. I'm moving into a new house in Wolverhampton and from now on I can concentrate on my football and try to help Wolves have a successful season."