The Mexico international made his way to Molineux in the summer of 2018 on a season-long loan from Benfica.
A productive debut campaign in England has delivered 15 goals in 37 appearances.
After seeing the 27-year-old star in Premier League and FA Cup competition, Wolves made no secret of their desire to retain Jimenez’s services.
An agreement which had been hinted at for some time has now been pushed through, with a four-year contract put in place.
Jimenez is delighted to be staying put, telling Wolves' official website: “It’s a great honour for me to now be a permanent member of the team. I’m very happy for this permanent deal as I feel that being at Wolves suits me.
“I’ve enjoyed my time here, I enjoy playing in the pitch and, along with all my team-mates, we try our best in all the matches to win.
“Since I’ve arrived here it’s all been so good. We’ve had some good moments, some bad moments; but the best ones have been so good and I’m very happy for that.”
He added: “I want to make history here at the club. With my team-mates, I want to put the club back into the top places in the Premier League. I think we all want that and have that ambition.
“For myself, personally, I want to keep scoring for the rest of the time I am here, and that’s going to be my main goal.”
Jimenez has struck up a devastating partnership with Portuguese frontman Diogo Jota during his time at Wolves.
The pair have helped to keep Nuno’s side in the hunt for a top-seven finish in the Premier League, and European qualification, while also firing them into the FA Cup semi-finals.
They combined again during their most recent outing against Manchester United, with Jimenez teeing up Jota to restore parity in a contest that delivered another notable scalp in a 2-1 win.
“We are understanding each other well, which is good for each other and the team, but we know without the contribution of the other players that nothing is possible,” said Jota.
“It is working at the moment and we just need to keep going."
Wolves' sporting director, Kevin Thelwell, has said of the deal to keep Jimenez alongside Jota at Molineux: “The impact Raul has made during his short time at the club has been fantastic and we’re delighted that he’ll be part of the club’s long-term future.
“From the second he walked through the door, he settled straight into the group, and that reflects in his performance, with Raul providing assists and overall selfless performances, as well as obviously goals.
“His goals in the Premier League and FA Cup have been vital to this season’s success and we’re looking forward to seeing him contribute even more during what will be an exciting end to the season in both competitions.
“Raul’s permanent signing shows the ambition of this football club and the determination to make sure the future is an exciting one.”