The contract, which was first reported last week, will pay Varitek a base salary of $2 million in 2011. He could make another $300,000 in incentives if he starts 80 games at catcher.
The 38-year-old Varitek has spent his entire major league career with the Red Sox. He batted .232 with seven homers and 16 RBIs in a substitute role last season, when injuries helped limit him to 39 games.
All-Star Victor Martinez, Boston's No. 1 catcher last year, became a free agent in the offseason and signed with the Detroit Tigers. That left the Red Sox with Varitek and Jarrod Saltalamacchia, a 25-year-old switch-hitter who was acquired from the Texas Rangers at the trading deadline.