The outfielder had asked for $4.25 million when exchanging proposed arbitration figures last month and the team had offered $2.8 million, making Monday's settlement $175,000 above the midpoint. Ludwick made $421,000 last year, when he had a breakout season with 37 homers, 113 RBIs and a .299 average.
"We are extremely happy to have this deal completed," general manager John Mozeliak said in a statement. "Everyone is ready to focus their attention on getting ready for the upcoming season. I know Luddy is glad to get this behind him and is looking forward to the 2009 season."
The contract includes $100,000 in performance bonuses based on plate appearances: $25,000 each for 625 and 650, and $50,000 for 675.
St. Louis avoided hearings with all five players who filed for arbitration and has not had a hearing since 1999. Outfielder Rick Ankiel agreed to a deal hours before a hearing was scheduled to start last week.
Both the Cardinals and Ludwick had been optimistic a hearing could be avoided.
"For me, it's not about the money, it's about being here," Ludwick said before the deal was finalized.
Last month, Ludwick said at the team's winter warmup that his goal for 2009 was 50 homers. He added to his weight training regimen.
"I really took it upon my shoulders to work as hard as possible," Ludwick said. "You kind of have a little bit of success and you see what you're rewarded with. My goal is to play this game as long as I can and I know if I take good care of my body that's going to give me the best scenario in order to do that."