The Scuderia ended the 2016 season in a winless state, beaten by Mercedes obviously but also by its direct rival Red Bull.
This year's major regulation overhaul will theoretically level the playing field, at least at the outset, and given its formidable resources Ferrari must always be considered a contender insists Wolff.
"In 2012 and 2013, Mercedes were not the favorites, then with the regulatory change we became successful," Wolff said in an interview with Italy's Gazetto dello Sport.
"It could happen to Ferrari. It has the potential and resources to go back to being competitive."
Ferrari President Sergio Marchionne stepped up the pressure on the team last year following the departure of tech boss James Allison.
The powerful Italian manager favoured promoting an insider - Mattia Binotto - rather than poaching a star engineer from another outfit.
While Marchionne has come under fire for his decisions and the pressure applied from within, Wolff perfectly understands the rationale behind Ferrari's thinking.
"They focused on being an Italian team. For me, that is an added value, not a restraint. Ferrari does not need mercenaries.
" I am convinced that the decisions taken by Marchionne and team principal Maurizio Arrivabene are moving Ferrari in the right direction."