Starlet has impressed for Wolves at youth level and is now set to gain experience of first-team football.
Rainey is usually deployed as a central midfielder but is also capable of operating as a right-back if required.
As reported by the club's official website, Rainey went straight into the squad for Chester's defeat against Altrincham in the Cheshire Senior Cup last night.
Rainey came close to finding the net on a couple of occasions but after the game finished 2-2 after extra-time it was Altrincham who prevailed on penalties.
The youngster has previously impressed for Wolves at U23 and U18 levels and this move represents his first step up to senior football.
Breaking into the Wolves first-team is certainly going to be a difficult proposition for Rainey, with Nuno Espirito Santo's side currently top of the Championship having produced some excellent performances so far this season.
However, the 21-year-old, who has been a Wolves player since 2014, will certainly relish the opportunity to play regularly for Chester and his performances may well encourage other potential suitors to attempt to sign him on a permanent basis.
Rainey will hope to make his league debut for Chester in Saturday's game away to Bromley as he looks to build upon an encouraging debut display.