The midfielder will continue his development at Molineux after his successful season-long loan at Sheffield United.
He helped the Blades to promotion back to the Premier League as well as reaching the FA Cup semi-final where they were beaten by City at Wembley.
Doyle has previously had loan spells with Hamburg in Germany and Cardiff City in the 2021/22 season.
He is also a regular for the England Under-21s and was part of the side that won the Under-21s European Championships, along with Taylor Harwood-Bellis, Cole Palmer and James Trafford, who has now joined Burnley.
The grandson of City legends Mike Doyle and Glyn Pardoe, the 21-year-old has made seven first team appearances for City since his debut in October 2019.
He has also enjoyed huge success during his time in the Academy, captaining City to the FA Youth Cup in 2020 and our EDS side to the Premier League 2 title in 2021.
Everyone at the Club wishes Tommy the best of luck during his time with Wolves.