The Indians announced the deal with the 37-year-old Davis on Saturday.
Davis led the American League with 43 stolen bases for Cleveland in 2016. In Game 7 of the World Series, he hit a tying, two-run homer with two outs in the eighth inning off Aroldis Chapman before the Indians lost in the 10th to the Chicago Cubs.
Davis signed with Oakland as a free agent before last year and was traded in midseason to Boston. He hit a combined .235 with stole 29 bases.
In 10 major league seasons, he has batted .264 with 394 career steals.
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