The midlands club have offered £3million for 24-year-old Mills who is believed to be keen to move to Molineux.
But the Royals are adamant any interested club will have to match their valuation before they consider letting Mills leave.
Reading skipper Mills will not force the issue by asking for a transfer, and Royals boss Brian McDermott wants to keep Mills who has been offered a new contract by the Berkshire club.
But it will still not match what the former Doncaster player could command by signing for Wolves for whom a centre-back is a priority this summer.
Jody Craddock, who will be 36 next month, has signed a new one-year deal and his experience is regarded as being an important factor in a young squad.
But Wolves manager Mick McCarthy is aware of the need to stop conceding the kind of soft goals which almost cost the club their Barclays Premier League status last season.
Mills has also been linked with a move to Blackburn and Stoke.
Source: PA
Source: PA