Peterson, a left-handed hitter, is expected to report Wednesday.
The 27-year-old Peterson played in three games with the Yankees this season, going 3 for 10 with a walk.
Selected by San Diego in the first round of the 2011 draft, Peterson broke into the big leagues with the Padres in 2014 before playing for Atlanta the past three years.
Peterson has 386 games of major league experience, primarily as a second baseman. He also plays third base, shortstop and all three outfield positions.