The 62-year-old has been named No.2 to former Walsall and Shrewsbury Town boss Matt Taylor, who took charge of the National League Premier club in January.
Connor, who will divide his time at the Moors with his other job as Grenada’s national team coach, was most recently working as assistant boss at Dagenham and Redbridge.
After a playing career which took in spells at Leeds and Portsmouth, he spent more than a decade at Molineux, having joined the club’s coaching staff under Colin Lee in 1999.
He became Mick McCarthy’s assistant in 2008 and helped steer the club back to the Premier League but his final months at Molineux turned sour.
Promoted to the role of manager after McCarthy was axed in February 2012, he was unable to prevent relegation from the top-flight and then left the club himself at the start of the following season, after Stale Solbakken had been appointed boss.
Connor went on to work with McCarthy again at Ipswich, Blackpool and with the Republic of Ireland.
Moors boss Taylor said: "Terry is one of the most respected and experienced coaches in the game and it's fantastic to have him here.
“He has a proven track record in developing players, demanding the best from the people around him, and it's a huge compliment to the club that someone so well regarded at all levels wants to play a part in what we aim to build here."