The Phillies announced the deal on Saturday. Francisco's contract includes performance and awards bonuses.
Francisco hit .268 with six homers and 28 RBIs in 88 games last season, including .282 (11 for 39) with seven RBIs as a pinch hitter. He has a .263 career average with 39 homers and 140 RBIs in 360 games for the Indians (2007-09) and Phillies (2009-10).
Right-hander Kyle Kendrick is the Phillies' only other arbitration-eligible player.