Monaghan, 32, was Super League's top try scorer last season and is about to start his fifth season with the Wire, having joined after leaving National Rugby League side Canberra in 2010.
He takes over from Michael, who shared the job with Ben Westwood last season.
Michael, 34, retired from playing at the end of last season and will work as an assistant coach at Catalan Dragons.
"Joel's leadership qualities and knowledge of the game made him the stand-out candidate," said Wolves boss Tony Smith.
Joel Monaghan is a former Australian international, winning five caps for the Kangaroos before his move to England
"He's developed as a leader and has become very influential within the group."
England forward Chris Hill, 27, who was linked with a move to the NRL last year before signing a new Wolves deal in July, has been elevated to vice-captain.
Smith hopes relieving Westwood of joint captaincy duties "will will allow him to focus on getting back to his best form we all know he's capable of".
He added: "Ben still remains an influential and integral part of the team's leadership, as do a number of other players who have missed out on the captaincy."
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