Blanco, 32, played in 90 games for the Phillies this past season and hit .253 with 15 doubles, four home runs, and 21 RBI. He also played all four infield positions and is a capable bat off the bench, leading the team with 15 pinch hits, including seven pinch doubles.
The one-year deal is believed to be worth $3 million.
To make room for Blanco on the 40-man roster the club designated left-handed pitcher David Rollins for assignment. Rollins was claimed off waivers in early December but became expendable once the Phillies signed veteran reliever Joaquin Benoit last week during the Winter Meetings.
The Phillies also announced Tuesday the club claimed former Tampa Bay Rays first-round pick Richie Shaffer off waivers from Seattle.
Shaffer, a 25-year-old, right-handed hitting corner infielder, hit .213 with five home runs in 51 major league games with the Rays over the last two seasons. The move was precipitated by the release of Phil Klein who is aiming to play in Asia, according to Phillies.