The 20-year-old has rose though the Wolves Academy system since arriving at the age of eight, the earliest possible age, and has been a regular for the under-23s over the past 18 months.
The Wolverhampton-born defender made his senior debut against Aston Villa in the Carabao Cup and featured on the bench twice in the Europa League earlier in the season.
The Cardiff switch is Sanderson’s first on loan and will see him battle for promotion to the Premier League with the Bluebirds.
Everyone at Wolves would like to wish Dion the very best during his time with Cardiff.