The 26-year-old Algeria international has only started two Premier League games this term with a further two starts in a total of 13 appearances.
He is available to make his debut in Tuesday's league game against Burnley.
"We needed another midfield player who can play either side and gives a bit of flexibility," Reds manager Steve Cotterill told BBC Radio Nottingham.
"At the beginning of the week Guy Moussi had a problem with his calf. Even if Guy was fit, at the moment, he's ended up going in the back four for us, which is not ideal. So, I needed another midfield player with some energy in there."
Guedioura initially joined Wolves on loan in January 2010 before signing permanently at the end of the season.
But he has struggled to earn a regular starting place at Molineux and also broke his leg last season.
Nottingham Forest have signed Wolves midfielder Adlene Guedioura on loan until the end of the season.