He is the fourth signing of the summer following the club's return to the Premier League, with Benik Afobe, Willy Boly and Diogo Jota all recently making previous loans into permanent deals.
Like several Wolves signings over the last year, Jimenez is another player with ties to Jorge Mendes, even though he is not directly represented by the super agent.
The 27-year-old, who collected a gold medal with Mexico on British soil at the 2012 Olympics, has won league titles in Portugal as well as his homeland. He also spent the 2014/15 season with Atletico Madrid as a replacement for Diego Costa.
Jimenez is currently with the Mexico squad ahead of this summer's World Cup and Wolves fans will be hope to catch a glimpse of him in action in upcoming games against Germany, South Korea and Sweden in Russia later this month.