The visitors led at the break through Helder Costa's penalty after Dave Edwards was felled by Jon McLaughlin.
Burton piled on the pressure after half-time and levelled when former Wolves winger Michael Kightly marked his debut by tapping in from two yards.
Woodrow hooked in the winner deep in injury time after Wolves failed to clear a corner.
Burton's win means they remain three points clear of the Championship relegation zone after third-from-bottom Blackburn also snatched a late victory over QPR, while Wolves drop to 18th after Nottingham Forest's injury-time win over Aston Villa.
In a scrappy first half of few chances, Lasse Vigen Christensen, on loan from Fulham like Woodrow, volleyed over Tom Flanagan's cross, while Wolves striker Nouha Dicko saw a shot tipped around the post by McLaughlin.
The visitors finally took the lead five minutes before the break when Costa drilled his spot-kick high into the net after McLaughlin brought down Edwards.
But Paul Lambert's side struggled to create anything of note after the break as Burton dominated.
Carl Ikeme tipped a Kightly shot around the post and a free-kick over the bar before the winger, who joined on loan from Burnley on deadline day, finally claimed the equaliser by converting Marvin Sordell's pass.
And Nigel Clough's side, who grabbed an injury-time equaliser when the two sides drew 1-1 at Molineux in September, got the winner when Woodrow turned in Flanagan's header from close range in the fourth minute of stoppage time.
Burton manager Nigel Clough: "It's about time we had one go in our favour. We have had enough heartaches to last us three seasons in the first 20-odd games.
"It's about the first time anything has really broken for us in the last minute in the penalty area. The corner has come in and just dropped to two of our lads and Cauley has ended up putting it in.
"The two new lads get the goals and it makes a difference when you can bring a few bodies in during January.
"We have created a few chances throughout the season, but it's nice now to have people who can finish them off."
Wolves head coach Paul Lambert told BBC WM: "In the first half I thought we did a lot with the ball. We got the lead and it gives you something to go with at half-time
"But in the second half we were not the same and we allowed Burton to come back into the game.
"The first goal is poor from our point of view, because it's too easy for them to get through our defence. For the second, our marking was not good enough at the set play.
"We have set ourselves such a high standard so the disappointment is there for everybody today. Sometimes you need a reality check, and today we just weren't good enough."
Match ends, Burton Albion 2, Wolverhampton Wanderers 1.
Second Half ends, Burton Albion 2, Wolverhampton Wanderers 1.
Goal!  Burton Albion 2, Wolverhampton Wanderers 1. Cauley Woodrow (Burton Albion) left footed shot from very close range to the centre of the goal. Assisted by Tom Flanagan with a headed pass following a corner.
Corner,  Burton Albion. Conceded by Kortney Hause.
Attempt missed. Cauley Woodrow (Burton Albion) header from the centre of the box is close, but misses to the right. Assisted by Marvin Sordell with a cross.
Lucas Akins (Burton Albion) wins a free kick in the defensive half.
Foul by Jón Dadi Bödvarsson (Wolverhampton Wanderers).
Marvin Sordell (Burton Albion) wins a free kick in the defensive half.
Foul by Lee Evans (Wolverhampton Wanderers).
Nouha Dicko (Wolverhampton Wanderers) is shown the yellow card.
Offside, Wolverhampton Wanderers. Lee Evans tries a through ball, but Nouha Dicko is caught offside.
Substitution, Burton Albion. Matthew Palmer replaces Lasse Vigen Christensen.
Foul by Tom Flanagan (Burton Albion).
Bright Enobakhare (Wolverhampton Wanderers) wins a free kick in the attacking half.
Attempt saved. Cauley Woodrow (Burton Albion) right footed shot from outside the box is saved in the bottom left corner. Assisted by Tom Flanagan.
Substitution, Burton Albion. Lucas Akins replaces Michael Kightly.
Substitution, Wolverhampton Wanderers. Ben Marshall replaces Andreas Weimann.
Substitution, Wolverhampton Wanderers. Jón Dadi Bödvarsson replaces Hélder Costa.
Attempt missed. Jackson Irvine (Burton Albion) header from the centre of the box misses to the right. Assisted by Lasse Vigen Christensen with a cross following a corner.
Corner,  Burton Albion. Conceded by Kortney Hause.
Michael Kightly (Burton Albion) wins a free kick on the left wing.
Foul by Hélder Costa (Wolverhampton Wanderers).
Attempt missed. Jackson Irvine (Burton Albion) header from the centre of the box misses to the left. Assisted by Lasse Vigen Christensen with a cross following a corner.
Corner,  Burton Albion. Conceded by Lee Evans.
Corner,  Burton Albion. Conceded by Lee Evans.
Attempt blocked. Tom Naylor (Burton Albion) left footed shot from the centre of the box is blocked. Assisted by Marvin Sordell.
Attempt blocked. Cauley Woodrow (Burton Albion) header from the centre of the box is blocked. Assisted by Luke Murphy with a cross.
Attempt missed. David Edwards (Wolverhampton Wanderers) header from the centre of the box is high and wide to the right. Assisted by Conor Coady.
Foul by Michael Kightly (Burton Albion).
Bright Enobakhare (Wolverhampton Wanderers) wins a free kick on the right wing.
Luke Murphy (Burton Albion) is shown the yellow card for a bad foul.
Foul by Luke Murphy (Burton Albion).
Bright Enobakhare (Wolverhampton Wanderers) wins a free kick in the defensive half.
Corner,  Burton Albion. Conceded by Conor Coady.
Corner,  Wolverhampton Wanderers. Conceded by Tom Flanagan.
Luke Murphy (Burton Albion) wins a free kick in the defensive half.
Foul by David Edwards (Wolverhampton Wanderers).
Delay over. They are ready to continue.
Delay in match Hélder Costa (Wolverhampton Wanderers) because of an injury.
Lasse Vigen Christensen (Burton Albion) wins a free kick on the right wing.
Cauley Woodrow scored an injury-time winner as Burton Albion fought back from a goal down to beat Wolves.