Wood, 30, gets $4 million this year and $6.5 million in 2018, and the agreement includes and $8.5 mutual option for 2019 with a $1.5 million buyout.
He was 4-0 with a 2.95 ERA in a career-high 77 appearances with the Chicago Cubs last season. He held lefties to a .128 average.
A 2013 NL All-Star, Wood spent the last five seasons with the Cubs after arriving in a trade with Cincinnati in 2011. He has a 43-52 career record with a 4.00 ERA in 133 starts and 126 relief appearances. Since transitioning to the bullpen in 2015, he is 7-2 with a 2.95 ERA in 122 appearances.