The left-hander will make $4.025 million this season, $4.65 million in '15, $6.3 million in '16 and $6.5 million in '17. The deal also includes a $6.5 million club option for the '18 season that includes a $700,000 buyout, guaranteeing Perkins $22.175 million through the '17 season.
Perkins, a Stillwater, Minn., native who also pitched at the University of Minnesota, said he was the one who approached the Twins about the extension because he wanted to stay with his hometown club.
"I think the priority was getting it done quickly, which we did," Perkins said. "I was the one who approached them because I want to be here. I made that clear. I believe in what we're doing here and I want to be a part of that. I'm thankful for them broaching the subject with me, and extending themselves on something they weren't required to do. So I'm appreciative of that and excited about it."
Perkins, 31, was an All-Star for the first time last year, when he posted a 2.30 ERA with 36 saves in 40 chances. The lefty also struck out 77 and walked 15 in 62 2/3 innings.
Twins assistant general manager Rob Antony said the deal happened quickly after meeting with Perkins' agent, John Courtwright, on Thursday. Antony added that Perkins wanting an extension came as somewhat as a surprise to the organization because Perkins had signed an extension before the '12 season.
"It kinda caught me off-guard a little bit because he had a few more years on his deal," Antony said. "But he was reasonable with what they came with and what they wanted to do. It made some sense for us. When he signed his initial deal it was as a setup guy with some protection if he became closer. This way, he gets treated like a closer. He gets security and we get a deal we're comfortable with."
Perkins, though, could only laugh when he was asked if he took a hometown discount to remain with the Twins.
"I'll take a $22 million discount any day of the week," Perkins said. "I want to be here and that's the most important thing. That's more money than I'll never need. It's not about that. It's about being here and being home."
Perkins took over as closer for the Twins during the '12 season, replacing Matt Capps in late June, and ended that season with a 2.56 ERA with 78 strikeouts in 70 1/3 innings to go along with 16 saves.
It came after he was moved to the bullpen full-time in '11, excelling with a 2.48 ERA with 65 strikeouts and 21 walks in 61 2/3 innings as a setup man.
But it wasn't always easy for Perkins, as he had a combined 5.87 ERA from '09-10, including a 5.81 ERA in 124 innings at Triple-A Rochester in '10. But Perkins has found his niche in the bullpen and made it clear that he doesn't want to pitch for any other club other than the Twins.
"I grew up in Minnesota and there's nowhere else I want to play," Perkins said. "So now hopefully this is something where I can play here my whole career."
Right-hander Mike Pelfrey was among those happy to see his teammate sign a new deal.
"He's pretty unbelievable," Pelfrey said. "It's a cool situation for him being a Minnesota guy to be able to stay home. Obviously, he's comfortable here. It's not one of those contracts where they're gonna regret it. I think the world of him, and it's a bargain no matter what he signs for. He's dominant and one of the better closers in the game."