Hamilton and Verstappen collided while battling for position at the first chicane midway through the Italian Grand Prix, forcing both drivers to retire from the race.
The accident saw Verstappen's Red Bull car end up on top of Hamilton's Mercedes, with the slow-motion replays showing one of Verstappen's wheels making contact with the top of Hamilton's helmet. The majority of the impact was buffeted by the halo on Hamilton's car.
Hamilton said after the race that his neck was "a bit sore" as a result of the crash that the FIA stewards are currently investigating in the aftermath of the race.
Asked if the halo had saved Hamilton's life at Monza, Mercedes F1 boss Wolff said: "Halo definitely saved Lewis's life today.
"It would have been a horrible accident, that I don't even want to think about, if we wouldn't have had the halo."
The halo was introduced to Formula 1 in 2018 by the FIA under the stewardship of president Jean Todt, who faced fierce criticism at the time. The safety device was hailed as protecting Charles Leclerc in the 2018 Belgian Grand Prix and played a huge role in Romain Grosjean's escape from the violent 2020 Bahrain GP horror crash, when his Haas car split open the Armco.
The collision marked the second major accident between Hamilton and Verstappen this season following their clash on the opening lap of the British Grand Prix back in July.
Wolff called the move by Verstappen a "tactical foul" after the race, but did recognise his own bias in judging the situation, saying that the stewards' decision would have to be respected.
Wolff said the battle between the two drivers - who are separated by just five points at the top of the championship - was "fierce" and "intense", but that they had to find a way to race each other cleanly.
"They need to find a way of how to race each other," Wolff said. "Either leave room in every direction, [or] there will be accidents, if it's not clear - and it's never clear cut actually.
"Like the Silverstone verdict was predominantly [to blame]. But they know in the car what they are doing and how they are racing each other.
"We should be watching with interest and hopefully not have eight accidents in the next eight remaining races."
Wolff felt it was important that the decision from the stewards at Monza clamped down on so-called 'tactical fouls' and prevent future clashes.
"We don't want to have situations in the future where one loses the position, and the only way of stopping the race or stopping the other one scoring is just by taking him out," Wolff said.
"Both of them need to leave space for each other, race each other hard, but avoid accidents.
"Because it was good fun until now, but we have seen a halo that saved Lewis's life today, and Max had this heavy impact in Silverstone.
"We don't want to come to a situation to intervene when somebody gets really hurt."