The 28-year-old outfielder was acquired from Texas on July 29, 2021, and hit .159 for the Yankees with 25 homers, 46 RBIs and 194 strikeouts in 421 at-bats.
"I have a lot of respect for how he worked, how he carried himself," Yankees manager Aaron Boone said. "A lot of us really feel for the situation he was in and the burden he felt and carried. I think a lot of us, myself included, very much hope he goes and kind of recaptures what we know he's capable of doing. I'll truly be rooting for him from afar.''
A two-time All-Star, Gallo has a $10,275,000 salary and is owed $3,613,187 for the remainder of the season. He is eligible for free agency after the World Series.
Beeter, 23, was 0-3 with a 5.75 ERA this season at Double-A Tulsa, striking out 88 and walking 35 in 51⅔ innings. He was drafted by the Dodgers with the 66th pick in the 2020 amateur draft and signed for a $1,196,500 bonus.