The Frenchman signed for Wolves from St Etienne last summer on a three-year contract for an undisclosed fee.
The 25-year-old has gone on to make 43 league and cup appearances for the club, scoring 12 goals, and was one of the few players to impress for the Molineux side last season as they were relegated.
He has been in good form again this term, netting twice in four appearances for Kenny Jackett's men as they look to bounce back to the Championship at the first attempt.
His proven form at Championship level has led Billy Davies to bid for his services as he mounts a Premier League promotion push.
Last month, Jackett confirmed talks were under way with Fulham over a deal to take Sako to Craven Cottage, but Forest have now entered the running.