Righty is seen as possible bullpen option after he recovers from Tommy John surgery.
Wood was one of nine Indians eligible for arbitration. Cleveland has until Friday to offer contracts to several players, including Justin Masterson, Chris Perez and Mike Aviles. The deals must be worth 80 percent of their salaries from last year to keep them on the roster. If the organization doesn't offer them deals, the players can become free agents. The Indians haven't gone to arbitration since 1991.
Wood was signed to a one-year deal worth $560,000. He was claimed on waivers from Kansas City on Nov. 2, and is seen as a possible bullpen option late in the season.
The righty did not pitch last year, but had a 5-3 record with a 3.75 ERA for the Royals in 2011, with 29 earned runs in 69⅔ innings. He also had one save and 62 strikeouts. He is recovering from Tommy John surgery on his right elbow, but could be fully recovered by midseason.