Frasor was 3-2 with a 4.32 ERA in 51 relief appearances last season, splitting time between Toronto and Triple-A Syracuse. He gets an $825,000 deal this year.
"We're just looking for a little more consistency, which he showed at the end of the year," general manager J.P. Ricciardi said. "The guy had 17 saves as a rookie a couple of years ago. He's done some really good things for us. I think last year he just hit a bit of a snag, but he went down and got himself right and pitched well in the second half."
The 33-year-old Thomson receives a $500,000 deal and can earn more in performance bonuses. He went 2-7 with a 4.82 ERA in 18 games, including 15 starts, for the Atlanta Braves last season.
Thomson pitched only 80 1/3 innings in 2006 because of mild fraying in his right shoulder and blister problems on his throwing hand. His previous season was also marred by injuries.
"We got medical clearance from our doctors, so there is no question about the health," Ricciardi said. "Last year there was some health issue, but he's pretty much done with them."
Ricciardi wanted to add depth to his rotation in case of injury. Thomson could earn as much as $4 million based on how many starts he makes.
"It's a low risk, high reward for him and for us," Ricciardi said. "If he does certain things he gets rewarded for it."
Thomson went 14-8 with a 3.72 ERA with Atlanta in 2004. He is 62-84 with a 4.69 ERA in 214 career games (210 starts) spanning nine major-league seasons. He also has pitched for Colorado, the New York Mets and Texas.
Frasor could make an additional $75,000 in performance bonuses this year: $25,000 for 55 games and 70 games, $10,000 for 60 games and $15,000 for 65 games. Last year, his salary was $359,000 while in the majors and $266,000 while in the minors.
To make room on the 40-man roster, the Blue Jays designated minor-league infielder Rob Cosby for assignment.