Wilson can earn an additional $700,000 in performance incentives, and the deal includes a player option worth between $9 million and $10 million based on performance, according to sources.
Wilson, the former San Francisco Giants closer, went 2-1 with a 0.66 ERA in 18 games as a setup man to Dodgers closer Kenley Jansen this past season after coming back from his second Tommy John surgery.
Sources told ESPN.com's Jerry Crasnick this week that Wilson told the Dodgers he'd be willing to return as a setup man with an opportunity to take over as closer if Jansen falters or gets hurt.
The Dodgers' bullpen went 30-24 last season with an aggregate 3.49 ERA, while ranking seventh in the league in strikeouts (451) and fourth in batting average against (.240).
The team signed Wilson to a $1 million contract on July 30 after scouting several of his workouts. He was promoted to the majors on Aug. 19.