Iglesias will earn a base salary of $2.5 million if he makes the team, and can make another $1 million through incentives based on games played, according to Mark Sheldon of MLB.com.
The one-time All-Star will battle to make the Reds' roster as a backup infielder and defensive specialist, an area in which the team lacked depth. His main competition will likely include fellow veteran non-roster invitees Derek Dietrich and Christian Colon, as well as Rule 5 Draft pick Connor Joe.
"No. 1, he just provides really great depth," Reds manager David Bell said, according to Bobby Nightengale and John Fay of the Cincinnati Enquirer. "He's been a shortstop. He's played third base. He's played second base. He's been a successful major-league player on really good teams. He's another guy that brings experience and winning."
Iglesias, 29, spent the last four seasons as the Detroit Tigers' primary shortstop. He slashed just .269/.310/.389 over 125 games last year but continued to display his trademark stellar defense; he accrued a 13.6 Def with an 8.2 ultimate zone rating and 316 assists.
His best season came in 2013 when he was the runner-up in AL Rookie of the Year voting.