Muller failed to reach double figures for goals in a Bundesliga season for the first time in five years last term, as he struggled to find his feet under Carlo Ancelotti.
With doubts over Robert Lewandowski's future at the Allianz Arena, Bayern are on the lookout for attacking reinforcements, while Muller has been challenged to play his part in adding a goal threat back into his game by club CEO Karl-Heinz Rummenigge.
"He'll have to play a stronger season," Rummenigge told Muncher Merkur. "The competition is also strong in his position. I wish him a strong season and a lot of goals.
Wagner's 11 goals in 31 Bundesliga games for Hoffenheim last season earned him a spot in Germany's Confederations Cup squad and the striker has three goals from as many outings for Joachim Low's side.
The 29-year-old began his career at Bayern and made a handful of first-team appearance almost a decade ago and was a reported target for the champions, but he has instead agreed fresh terms with Hoffenheim until 2020.
Wagner said: "I am happy that I could agree this deal to stay with TSG. I want to help us achieve even great success in the future.
"We face a challenge with our first participation in an international competition [Hoffenheim qualified for the Champions League play-offs], which we will meet with great ambition."