Wolf will earn $175,000 for starts 11-30, or $3.5 million. He'll get $250,000 if he pitches 190 innings, and another $500,000 if he pitches 200 innings.
Wolf spent last season with the Dodgers, but didn't pitch after July 3, and he underwent shoulder surgery in September to repair a frayed labrum. Wolf was 9-6 with a 4.73 ERA in 18 starts with the Dodgers, who declined the 2008 option for $9 million on him last month.
Wolf, in a conference call with reporters, said that he's healthy and ready to make a push toward 200 innings, a plateau he hasn't reached since the 2003 season.
"I have every expectation to be 100 percent and make every start," said Wolf, who has already started his winter throwing program. "I fully expect to get 200 innings. I expect to make 30 to 32 starts and pitch 200 innings."
Wolf, a left-hander, is 78-66 with a 4.25 ERA since breaking into the Major Leagues with the Phillies in 1999. He signed a one-year contract worth $8 million with the Dodgers last season.
"We certainly knew there was some risk, a guy coming off surgery," Padres general manager Kevin Towers said. "This guy was very effective pitching the first half for L.A. last year. He had nine wins. The way we look at it, we're getting a guy with a fresh arm."
The Padres signed veteran Greg Maddux to a one-year deal worth $10 million last month, giving them a formidable trio atop their starting rotation with National League Cy Young Award winner Jake Peavy and Chris Young.
Now they have Wolf.
"He has the ability to pitch 200-plus innings," Padres manager Bud Black said. "I like that he's left-handed. He's a great competitor. He's a guy that, to go along with Maddux and Young and Peavy, and we feel as though we've got four very capable, solid starters who have done it in the past and can continue to do it in the future."