Central defender Craddock, who has suddenly become a prolific goalscorer, was on target with his fourth goal in nine games in the third minute of stoppage time.
A point was the least that Wolves deserved as they had dominated the game for long spells. But they looked set to be undone by the finishing power of Robert Earnshaw, who marked his first ever appearance at Molineux with a high-class double to take his goal tally for the season to 16.
Karl Henry, with his first goal for Wolves following his £100,000 summer switch from Stoke City, had cancelled out Earnshaw's opener.
Wingers Michael McIndoe and Michael Kightly then ran the Norwich defence ragged but, not for the first time this season, there was a lack of end product for Wolves who can only dream what it must be like to have a striker as potent as Earnshaw leading their attack.
McCarthy, who was desperate to get a victory against his former Celtic team-mate Grant, has now seen his side fail to win any of their last four home games - a run that is casting a cloud over their promotion hopes.
Norwich, who had lost their last three games and failed to score on their previous six trips to Molineux, looked set to pull off a real smash and grab raid before Craddock's late show.
Earnshaw needed just 10 minutes to make his presence felt with a neat piece of close-range finishing. Lee Croft whipped in a right-wing cross that Dion Dublin nodded into the path of Earnshaw who lobbed home from close range.
Earnshaw came close to doubling Norwich's advantage 12 minutes later with a dipping drive that crashed off the bar.
That was the wake-up call Wolves needed and they moved up a gear and deservedly equalised nine minutes before half-time when Henry volleyed home from the edge of the area.
The goal signalled the start of almost total Wolves domination in which Kightly and McIndoe were the outstanding performers.
But there was no end product and Earnshaw looked to have made them pay 13 minutes from time. He came up with a spectacular overhead kick after Dublin had nodded back a cross from Darren Huckerby.
While Wolves might lack a cutting edge, no-one can doubt their spirit and that was rewarded deep into stoppage time when Craddock swept home Mark Little's cross.