Santos gave up seven earned runs in 13 1/3 innings for the Los Angeles Dodgers this season before being designated for assignment on May 27.
According to Ken Rosenthal of Fox Sports, who first reported the signing, Santos will be assigned to Double A Trenton.
Last season for the Toronto Blue Jays, the 31-year-old had an 8.57 ERA in 21 innings with 29 strikeouts.
The Yankees currently have the fourth-best ERA (3.11) among American League bullpens.
New York (32–25) is hosting the Washington Nationals on Tuesday.
- Molly Geary