Kennedy threw 30 pitches on Wednesday, and is scheduled to have another batting practice session on Saturday. The 24-year-old could pitch in a two-inning simulated game on Tuesday.
The right-hander was pitching for Triple-A Scranton/Wilkes-Barre in April when he had numbness in his pitching hand. He is set to pitch in September's instructional league and later in the Arizona Fall League.
Kennedy went 1-4 with a 6.14 ERA in 13 major league games with the Yankees in 2007 and 2008, including 12 starts.
"It was fun to finally get some competitive juices flowing and to see some hitters," Kennedy said. "I'm surprised I wasn't tired at the end."