Siler's agent, David Canter, confirmed the deal Saturday in a text to The Associated Press.
Siler was expected to compete for time at middle linebacker alongside Pro Bowl selection Derrick Johnson after spending last season with the San Diego Chargers. He had a good start to training camp but was hurt in late August, and had surgery to repair his Achilles a few days later.
Canter said that "rehab's going well" and Siler is looking forward to August.
The former Florida linebacker made 12 starts in 58 games over five seasons with San Diego. He had 38 tackles, a sack, an interception and a forced safety during the 2010 season.
The deal came one day after news broke that the Chiefs had signed kicker Ryan Succop to a five-year extension worth $14 million. Succop's deal includes a $2 million signing bonus.
General manager Scott Pioli still has several decisions to make in the coming weeks.
Cornerback Brandon Carr, who has been a stalwart opposite Brandon Flowers in a talented Chiefs defensive backfield, will become a free agent after this season. So will Dwayne Bowe, who made the Pro Bowl last season and has quietly put together another outstanding year despite a carousel of starting quarterbacks. Bowe has 75 catches for 1,066 yards and five touchdowns.
Pioli may also try to re-sign Kyle Orton, who will start his third straight game Sunday at Denver. The veteran quarterback, who will also be a free agent, was claimed off waivers when Matt Cassel went down with a season-ending injury to his throwing hand.
The Chiefs also will need to address their offensive and defensive lines.
Longtime center Casey Wiegmann is considering retirement after a season in which he acknowledged spending more time in the training room. Offensive tackle Barry Richardson has struggled much of the year, and veteran defensive tackle Kelly Gregg has been playing on a one-year deal.
Siler's signing solidifies the linebacker unit.
Johnson was chosen to his first Pro Bowl after setting a single-season franchise record with 172 tackles heading into Sunday's game at Denver. He'll be joined in Hawaii by outside linebacker Tamba Hali, who has racked up 12 sacks despite facing repeated double teams.