The Yankees already have six pitchers, making Pettitte the seventh. The pitcher could potentially be joining CC Sabathia, Hiroki Kuroda, Michael Pineda, Ivan Nova, Freddy Garcia and Phil Hughes.
The left-handed pitcher had played in each of the Yankees' last four World Champions teams alongside Derek Jeter, Mariano Rivera and Jorge Posada.
According to ESPN, Pettitte was drafted in 1990 in the 22nd round by the Yankees, and he was named the ALCS MVP in 2001.
Pettitte had announced his retirement last February at Yankee Stadium after he missed two months in the summer of 2010 due to a groin injury. According to the New York Times, the Yankees had been preparing to offer the player $12 million to come back.