Friend played for Wolves against Manchester United last season but has joined Rovers after being released by the Black Country club.
A left-back, who will fill the role vacated by Gareth Roberts, Friend said: "I want to move forward with this club and we have seen from Blackpool that anything is possible in football."
Friend, 22, started his career at Exeter City and was sold to Wolves for 350,000 two summers ago. He made only six starts for Wolves and was loaned out to Millwall, Southend United, Scunthorpe United and Exeter last season.
Sheffield Wednesday manager Alan Irvine wants former Derby County winger Gary Teale to become his fifth new signing of the summer.
Scottish international Teale, 31, was released by Derby at the end of last season and spent a brief spell on loan with Barnsley two seasons ago. Irvine made rapid progress in the transfer market last week, signing Chris Sedgwick, Jon Otsemobor, Paul Heffernan and Daniel Jones.
Middlesbrough chairman Steve Gibson has warned Barclays Premier League clubs not to try to lure David Wheater away from Teesside.
The 22-year-old Redcar-born defender has been linked with several top-flight suitors following Boro's failure to win promotion from the Championship.
But Gibson said: "David is totally committed to this club, and is Middlesbrough through and through. We would not want him to leave."