According to MLBTR, the Cubs have signed Scott Baker to a 1-year deal. Baker missed the entire 2012 season after undergoing elbow ligament replacement (Tommy John surgery). His last start was August 8th, 2011 and he made 2 appearances in late September that year as a reliever.
Prior to his surgery, Baker was quietly putting together a very solid MLB career. He has a career 4.15 ERA and a 3.95 FIP. He's been worth 17 fWAR and 14.7 rWAR. He has a career 19.2 K% and has walked only 5.6% of the batters he has faced. That's a very good K-BB% and those two stats are by far the most predictive stats a pitcher has. If all you knew was the strikeouts and walks, you could do a fairly good job at predicting how pitchers perform in future years.
What you wouldn't be able to predict very well is how pitchers coming off TJS will perform. Each pitcher is different and while some return to form, some don't. The terms of the contract have not yet been disclosed, but it's probably a contract worth around $1-2 million. It might also have a club option for 2014.
CAIRO projects a 4.21 FIP.
UPDATE: According to Patrick Mooney, the Cubs will pay Baker $5.5 million with incentives that could make the deal worth a total of $7 million. I'm a little surprised at how much money it's taking to sign a reclamation project. Typically these guys are signed for much less.