The deal includes a player option for the second year.
It wasn't clear if Portland had much money beyond the mid-level exception to retain Hood going into free agency. However, he'll earn his presumed market value at approximately $8 million per season.
Hood has been inconsistent at times throughout his five-year NBA career, although he's also shown flashes of brilliance. He averaged 14.7 points on 50 percent 3-point shooting in six games against the Denver Nuggets during the second round of this spring's playoffs.