The one-year deal is worth $2.25 million, a league source told ESPN.com's Pierre LeBrun.
The 26-year-old Upshall had a career-high 18 goals and 14 assists in 49 games for Phoenix before sustaining a season-ending knee injury on Jan. 28 against Calgary. He led the team in goals at the time of his injury and underwent surgery to repair a torn ligament in his right knee.
Upshall was traded to the Coyotes in March 2009 in a deal that sent enforcer Daniel Carcillo to the Philadelphia Flyers. Upshall had eight goals and five assists in 19 games with Phoenix to finish the 2008-09 season.
Information from The Associated Press was used in this report.