Wilson signed the deal on Tuesday, the same day the team tendered one-year contracts to retain the rights of three potential free agents: safety Donte Whitner, linebacker Paul Posluszny and tight end Scott Chandler.
The Bills also signed offensive lineman Mansfield Wrotto to a contract extension.
"I'm definitely relieved," Wilson told The Associated Press by phone shortly after traveling to Buffalo to sign his contract. "I have a home here and there was so much uncertainty out there with 500 free agents, it was a matter of both us finding a common ground we're both comfortable with."
Wilson also doubles as the team's NFL Players Association representative. Knowing where he'll play next season removes one bit uncertainty for the fifth-year player as the league and union attempt to negotiate a new collective bargaining agreement before it expires on Thursday night.
Wilson negotiated his contract after he received a one-year tender from the Bills last week. He's proven to be a valuable role player, who has 26 starts in 60 games over the past four years.
Wrotto is a fourth-year player, who was promoted from the Bills practice squad in October. He had seven starts in 11 games last season.
Though tendered contracts, the status of Whitner, Posluszny and Chandler remains uncertain as it's unclear whether they will become restricted or unrestricted free agents under a new CBA.
Posluszny told the AP he was encouraged to know he's still wanted by the team after formally receiving the contract offer by mail last week. The next step for him will be negotiating a long-term deal.
"As a guy who wants to be part of the organization, this is certainly a positive step in the right direction," Posluszny said Tuesday. "I want to be a Buffalo Bill for a long time."
Posluszny, a 2007 second-round draft pick, completed a four-year contract. After missing much of his rookie season with a broken arm, he's been a three-year starter, who led the team with 151 tackles last season.
Due to Posluszny's status as a fourth-year player, the Bills were restricted in negotiating a long-term deal to re-sign him last year.
Now he'll sit tight and wait.
"That's the hard part," Posluszny said from his home outside of Pittsburgh. "The only thing you can do is train as hard as you can, so when we're ready to go back to work we can."
Whitner, Buffalo's 2006 first-round pick, completed a five-year contract last season. After initially expressing interest to re-sign with the Bills, Whitner grew unhappy with the team's offer and broke off talks in December while saying he was preparing to test free agency.
Whitner was so intent on leaving Buffalo that he had his locker cleaned out and was not available for interviews a day after a 38-7 season-ending loss to the New York Jets.
He's a five-year starter, who finished second on the team with 138 tackles last season. Whitner added one interception, forced a fumble and was credited with a half a sack on a defense that finished last in the NFL against the run.
Chandler joined the Bills in December after being claimed on waivers from Dallas.
Linebacker Keith Ellison's agent, Christopher Ellison, said he doesn't expect the Bills to tender the fifth-year player a contract.