McCarey, 21, enjoyed eight games between the posts for the Saddlers over November and December and he is happy to be back at the Banks's Stadium.
"I'm very pleased to return here," he said. "It's good to come back into a winning team that is moving in the right direction and hopefully I can play my part in this continuing.
"It's good to know that I will be here until the end of the season and have the opportunity to play regular games.
"I already know everyone at the club, so it will be an easy transition and I am looking forward to getting back into the swing of things."
Walsall started the season with David Grof as number one before Karl Darlow was brought in on loan in September and later recalled by parent club Nottingham Forest.
Saddlers boss Dean Smith turned to McCarey before Darlow was re-signed in January and then recalled once more just as quickly by Forest.
Smith subsequently moved for MK Dons keeper Ian McLoughlin in the same month but has this week been unable to extend his stay, meaning a move for McCarey is the latest in a lengthy search for a settled stopper between the sticks.
Smith said: "Whilst I was disappointed to see Ian McLoughlin recalled by MK Dons, I had no qualms in bringing Aaron back here. He had a really good spell with us just before Christmas and showed us what he is all about.
"I'm only too happy to have him back here and I am delighted that Wolves have allowed us to keep him for the remainder of the season. He will compete with David Grof and is a welcome addition to our squad."
