Wolves’ options down the wing are limited, with the likes of Jordan Graham and James Henry on the sidelines.
However, Jackett has no intention of cutting Wallace’s temporary spell at the New Den short.
“It’s been a good spell for him and we want him to continue progressing,” he said.
“In terms of wide left it’s more of a problem for us, but we’re not looking to recall Jed.”
Wallace was brought to Wolves from Portsmouth last summer, but he has struggled to make an impact at Molineux.
The 21-year-old made seven appearances for Wolves in the early part of the campaign, but failed to make much of an impression.
Wallace has proven his quality on his spell at Millwall, though, and he has quickly become a key part of Neil Harris’ first-team.
He has made nine appearances for the Lions already, helping the London club make it into the League One play-off places.