The news will be a massive boost to boss Ally McCoist, and comes on the day Kyle Lafferty looks set to confirm he will not be joining the new company and becomes part of the Ibrox exodus.
Gers chief executive Charles Green has already seen Steven Naismith and Steven Whittaker leave the club for nothing after refusing to come on board, with Sone Aluko and Rhys McCabe set to follow suit.
Wallace joins midfielder Lee McCulloch in committing his immediate future to Rangers after holding talks with Green this week. He said: "When I arrived at Ibrox the support from the club, players and fans was fantastic.
"The fans showed great faith in us all during tough times and I still feel I have more to show them during the remainder of my contract. My partner is expecting our first baby soon and my priority is to my family. This gives me the incentive to improve my performance and ultimately win trophies. My personal decision in no way condemns or judges those made by my fellow professionals as I believe each person has different circumstances and reasons which will determine the road they choose to travel. I respect the decision taken by each individual."
Wallace moved to Ibrox last summer in a £1.5million deal from Hearts but elected to take a 75% pay cut in February as the club plunged into administration. With 'old' Rangers now in liquidation, players have the option whether to transfer their contracts to the new company set up by Green.
Wallace will report for pre-season training this week and, if he does move on later in the summer, Rangers will now be guaranteed a fee.
Players have until Thursday, when wages for June are due to be paid, to decide whether they wish to transfer their contracts to newco Rangers for next season, with a host of top-team stars set to join the exodus and quit for free.
Turkish side Bursaspor are interested in Maurice Edu while Besiktas are believed to be keen on landing Allan McGregor.
The loss of stars such as Naismith, Whittaker and Lafferty for no fees will be a huge blow to Green.
A place in the SFL now awaits the Gers next year, but the Ibrox chief executive believes his departed stars are the ones missing out.
Green said: "All players want to play at the highest level, but I look at what's behind me now and this is a huge club, irrespective of what league it is in.
"And if someone wants to go and play in another league, they won't be playing at a bigger club than this."
Meanwhile, the SFL board met today to discuss proposals to merge with the SPL – and parachute the newco Rangers into the First Division.
Initial talks were held last weekend by the SPL, SFL and the SFA over plans to merge the two leagues into a single body, but several key details have yet to be agreed.
The SPL will also meet to discuss whether Dundee or Dunfermline will take Rangers' place in the top flight next term.