The midfielder was on the verge of a move to Birmingham in the summer but it broke down, apparently over personal terms.
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Speaking ahead of the match against Wolves, Martinez claimed N'Zogbia has put the past behind firmly behind him.
He said: "The moment the window closed I could see a completely different outlook regarding Charles' situation. The players saw exactly the same.
"He earned the respect of his team-mates and that is what is important. It is not about individuals, it is about the team. He has worked really hard to get back into the side.
"He is a good example of any footballer who has suffered from instability during the transfer window. That is something we should give him credit for."
Martinez went public this week on how concerned he was about tough tackling and how skilful players needed more protection.
But he has no qualms about facing Mick McCarthy's team, who have been branded in some quarters as being too physical.
Martinez said: "Sometimes you develop a reputation that is sometimes deserved and sometimes not. I do not think Wolves have a nasty streak at all.
"There have been two or three situations where they have been unfortunate with the challenges. Every club has a different style. Every club knows how to achieve their aims in the season.
"When you are a little bit physically strong you are risking getting the referee against you. That is a gamble. You could get hurt or get red cards.
"I think the reputation Wolves have is a little bit unfair. It is something that is going to level up in the course of the season."
Wigan striker Franco Di Santo could face Wolves despite suffering an ankle injury in the draw with Birmingham.
The Argentinian has made a quick recovery after being in some distress following a challenge by Birmingham midfielder Craig Gardner, which saw him sent off.
On-loan midfielder Tom Cleverley might also come into contention after he injured his knee in training.
Meanwhile, McCarthy believes Wolves' recent mini-slump should be put into perspective but admits "it's results that count".
Wolves will be looking to halt a run of three successive defeats when they visit Wigan.
It has led McCarthy to concede that his side's start to the campaign has been reduced "from good to average" but the former Republic of Ireland boss believes Wolves have performed creditably in leading at Fulham and Tottenham and levelling against Aston Villa before being beaten.
He said: "Three games ago it was looking a really good start, now it looks like being an average one.
"I think we have to put it into perspective, the teams we've lost against.
"One was a Europa League finalist (Fulham), another a Champions League team (Tottenham).
"Then we've faced a team who've finished sixth in the Premier League for the last three years (Aston Villa).
"So we haven't been playing any mugs, and we've played well against them - but it's results that count. We need to pick up some points.
"We've played well. It counts for nothing if we get no points after a while."
Wolves midfielder Adlene Guedioura will be sidelined for up to six months with the broken leg suffered against Villa.
But McCarthy has exonerated Villa midfielder Steve Sidwell, whose tackle on Guedioura led to the injury, from any blame.
He said: "I think Sidwell went for the ball and completely missed it.
"It wasn't a nice tackle but I don't think he went to kick Adlene.
"I think he went to get the ball and it was mistimed and he had only just come on the pitch.
"Sadly one of our lads has got a broken leg but I am not condemning Sidwell at all."
Source: DSG
