The yellow wolf spent so long being concerned he would be found out that the last panel is a moment of catharsis; that he has been accepted as a member of the community regardless of who he is or was. He observes his wolf friends who once denounced his behavior sharing the original wolf culture with the sheep. Likewise he can see the sheep partaking in the wolf culture freely, bringing to a close his earlier fears about being found out. The elephant recognizes this and confirms that yes everything is going to be alright he’s not imagining it. (At least that’s how I read it)