It is not clear when or if the 40-year-old, who has more than 2500 hours' flight experience, will return to flying.
He had been co-piloting the Dash-8 aircraft with Australian captain Bill Spencer when they struck trouble as they approached Madang airport.
An airline spokesman said that the crew attempted to conduct a controlled emergency landing but the aircraft broke up as it hit the ground and part of the fuselage caught fire.
Only Mr Wagstaff, Mr Spencer, a flight attendant and a single passenger survived.
The flight attendant, Kapi Eria, is recovering in hospital in Port Moresby, while the passenger, who is from Malaysia, is expected to be released from hospitalsoon.
Both Mr Wagstaff and 64-year-old Mr Spencer were flown home to Australia on Saturday on a Medevac flight.
Mr Spencer's son-in-law Conal Hanna told the Brisbane Times the captain was surrounded by his immediate family as doctors at the Royal Brisbane Hospital assessed his injuries, which are believed to include a fractured leg.
Mr Hanna said Mr Spencer thought he was going to die as the plane plunged towards the ground.
"He's distraught. He'll recover from his injuries but he's very traumatised by what's happened. He told us he now knows what it feels like to die. He thought as the plane was going down, 'This is it'."
The flight data recorder and cockpit voice recorder have been recovered from the wreckage and will be sent to Australia for assessment.
The airline said an investigation into what went wrong would be "wide-ranging" and include looking at the bad weather in the area at the time of the crash, fuel, and any possible midair fire or mechanical problems.
