The Chicago White Sox have signed pitcher Jake Peavy to a two-year contract worth $29 million.

The new deal also includes a $15 million option in 2015 if Peavy reaches an innings threshold over the next two seasons.

Peavy pitched over 200 innings for the first time since 2007 last season. The right-hander made 32 starts and went 11-12 with a 3.37 ERA and 194 strikeouts.

"Jake Peavy showed again last season why he is capable of being one of the top pitchers in the American League," said Rick Hahn, White Sox senior vice president/general manager. "We're happy to reach a deal that keeps him at the top end of our rotation and his influence in our clubhouse for at least the next two years."

Peavy, 31, made the All-Star team for the third time in his career last season. He won the 2007 NL Cy Young Award while with the Padres, but has suffered through a series of arm issues since.

Also coming back to Chicago next year is pitcher Gavin Floyd, who had his $9.5 million option picked up. Floyd went 12-11 with a 4.29 ERA and 144 strikeouts in 29 starts last season. The 29-year-old has reached double-digit wins each of the past five years.

While Peavy and Floyd return to Chicago, the club declined its options on third baseman Kevin Youkilis and pitcher Brett Myers.

Youkilis, acquired in a midseason trade with the Red Sox last season, batted .236 with 15 home runs and 46 RBI and 47 runs in 80 games after the deal.

Myers, another addition near the trade deadline, went 3-4 with a 3.12 ERA in 35 relief appearances for the White Sox.