McDonald fell down the pecking order last campaign, with Jack Price and George Saville amongst the players to move ahead of him in the competition for places in Wolves’ midfield.
McDonald's slip down the selection order, lead to Glasgow Rangers becoming interested in the former Sheffield United man.
According to the Express and Star, Rangers had placed McDonald on their wishlist ahead of the summer transfer window.
However, Jackett and McDonald appear to have made up their differences, and the 54-year-old boss now wants the ex-Scotland youth international to remain at Molineux.
“We want him to stay,” Jackett confirmed.
"We haven’t had any bids for Kevin, despite him not being involved towards the end of last season.
"Kevin has reported back, he looks fit and well and it’s a fresh start and a fresh season for everyone.
"He’s got to work hard now to get back into the team. It has to be a fresh start for him and every pre-season is like that.”
McDonald remains one of Wolves’ star players, but he will face a fight to win back his place in the team.
Both Saville and Price impressed towards the back end of last campaign, meaning McDonald will have to show his quality over pre season if he wants a starting role on the opening day of the season.
McDonald made 35 appearances for Wolves in total last term, and he scored on three occasions.