Naylor spent nine years with Wolves

Naylor, 27, and Mulgrew, 20, have both signed three-year contracts and Celtic have a further year's option on Naylor.

Naylor said: "I had a good nine years at Wolves but this is a dream come true for me. It is a massive step.

"But I am confident in my own ability and, hopefully, I can show people what I am about."

Wolves chief executive Jez Moxey told the club website: "Lee made it plainly clear he wouldn't sign a new contract.

"Faced with that situation the club reluctantly decided to agree to his request (to join Celtic)."

Naylor came through the ranks at Wolves and has made 334 appearances for the English Championship club.

Wolves had offered him a new four-year contract, but manager Mick McCarthy admitted that the lure of Champions League football was pivotal in prising the defender away.

"He's had a good innings here and done well for the club so I've no problem," he told Wolves' website.

"When you've got a player who has done great for the club, if someone comes in for him and he gets the opportunity, I fully understand his desire to move on to fresh pastures.

Naylor turned down the offer of a new Wolves contract

"But, as we proved last Saturday, if somebody leaves then someone else comes in and plays."

Mulgrew, 20, was on loan to Dundee United last season and has not featured for Celtic this season.

The Tannadice club had hoped to sign Mulgrew permanently and St Mirren were also keen on taking the Scotland under-21 international but he opted to move to Molineux.

McCarthy added: "Charlie is a good footballer.

"He's over 6ft and is a left-sided player at either full-back or centre-back and as we've now lost Lee, he'll help cover that area.