Answer
Let the polynomial be $P(x)=a_0+a_1x+a_2x^2...$
We know, $P(0)=0$
$\implies P(0)=a_0=0$
We know if we substitute $x^2+1$ in place of $x$.
We will get constant value too. Which are the sum of the coefficients.
But we proved above that the polynomial $P(x)$ should not have a constant term.
hence, the coefficients should be equal to one.
Thus, the polynomial $P(x)=x+x^2+...$
We have given $P(x^2+1)=(P(x))^2+1$
On the right-hand side, there is only one constant.
But, if we substitute $x^2+1$ in the place of $x$.
There will be as many constants as there is $x$.
Hence, polynomial $P(x)=x$ is the only polynomial with satisfy the conditions $P(x^2+1)=(P(x))^2+1$ and $P(0)=0$.
Work Step by Step
Let the polynomial be $P(x)=a_0+a_1x+a_2x^2...$
We know, $P(0)=0$
$\implies P(0)=a_0=0$
We know if we substitute $x^2+1$ in place of $x$.
We will get constant value too. Which are the sum of the coefficients.
But we proved above that the polynomial $P(x)$ should not have a constant term.
hence, the coefficients should be equal to one.
Thus, the polynomial $P(x)=x+x^2+...$
We have given $P(x^2+1)=(P(x))^2+1$
On the right-hand side, there is only one constant.
But, if we substitute $x^2+1$ in the place of $x$.
There will be as many constants as there is $x$.
Hence, polynomial $P(x)=x$ is the only polynomial with satisfy the conditions $P(x^2+1)=(P(x))^2+1$ and $P(0)=0$.