The 34-year-old Croatia international's contract with the Bundesliga club expires at the end of the current campaign and he has not yet agreed a new deal.
Olic this week stated that he expects to remain at Wolfsburg, but Hughes is eager to bring the former Bayern Munich man to the Premier League.
"Ivica Olic is a player that we like and one that we are pursuing," he told reporters.
"There have been one or two reports in the media saying this, that and the other, but for as long as we see the deal as one that we could complete then we will remain in the hunt for his signature.
"He is a quality player and somebody I have met on a few occasions and I really like him.
"He has played at the top level for the duration of his career, he possesses incredible pace and he is technically very, very good.
"We have to give the guy time to make the decision that he feels is right.
"It isn't dead in the water yet - he just needs time to make what will be a key decision for him."
Olic has scored 12 goals in 24 appearances for Dieter Hecking's side in the German top flight this season.