Loe, 29, avoids arbitration with the deal. He can earn an extra $115,000 if he makes 78 appearances in 2011. Loe was seeking $1.65 million in arbitration and the Brewers offered $1.055 million.
Loe signed a minor-league deal last offseason and was called up on June 1. In 53 games, Loe was 3-5 with 2.78 ERA, striking out 46 in 58 1/3 innings.
The team still has two players left on tap for arbitration, Rickie Weeks and Shaun Marcum.
-- C. Trent Rosecrans