Mark Bartelstein, Anderson's agent, says the deal is for two years.
Both contract years are fully guaranteed, with a player option for the second year, writes Tim Bontemps of the New York Post.
Last season Anderson played in 65 games, scoring 10.7 points and shooting 33 percent from beyond the arc in 23 minutes per game. He became a free agent at the end of the season.
After time overseas and in the D-League, Anderson initially signed to Toronto on a 10-day contract in March of 2012. He had been out of the NBA since 2007.
He also has a reputation as a good on-ball defender. Raptors coach Dwyane Casey said he was immediately impressed with Anderson's defensive performance against the Pacers' Danny Granger during one of his first games in Toronto.
Anderson played four years of college basketball at Michigan State. He went undrafted in 2005.