The new contract is $2.5 million more than the player option Jeter could have picked up.
A source with knowledge of the negotiations told ESPN New York that the talks were largely held between Jeter and team owner Hal Steinbrenner, who both live in Tampa. Jeter's agent Casey Close handled the details of the contract.
Jeter, who turns 40 in June, had the option to opt out of the final season of his current four-year contract and try free agency. The original deal called for him to make $9.5 million in 2014 -- more than half of the $17 million he had earned the previous three seasons. But Steinbrenner and Jeter made sure that didn't happen and helped each other's causes.