A Form W-4 can be updated at any time. When there is a financial change in the household, you should consider if the W-4 should be updated.
The Form W-4, Employee's Withholding Certificate was redesigned in 2020 as a result of the Tax Cuts and Jobs Act (TCJA) of 2017. The new form considers all sources of income, including multiple jobs or a spouse's income to determine the correct withholding.
When updating your wife's, you will want to take into consideration the changes in your household income.
The IRS has a Tax Withholding Estimator to help employees accurately calculate their withholding. IRS Withholding Estimator