The Twins announced the deal on Saturday. It also allowed the Twins to reach deals with all six of their arbitration-eligible players without going to a hearing.
Duensing, a lefty specialist out of the bullpen, went 3-3 with a 3.31 ERA in 54 appearances last season. He has been with the Twins all six of his years and asked for a raise from $2 million to $3.1 million. Minnesota offered $2.4 million.
Duensing was also honored by the Twins this week for his work in the community.
The Twins have not gone to arbitration with a player since Kyle Lohse in 2006.