He can earn a maximum of $12.75M over the life of the new deal. However, he takes a pay cut first. Woodyard was scheduled to make $4.75M this year ($4.25M base salary) but now has a base salary of $2.2M, plus a $1M roster bonus that was paid out on the 5th day of the league year, plus $300k available in per-game roster bonuses. A trade off that works for both sides.
Woodyard was scheduled to enter the last year of his deal in 2017, so this move gives him a little bit of security. It also paid him a million earlier this week instead of the $500,000 he was originally scheduled to get.
Jon Robinson said earlier this week that Woodyard would be on the roster. This move just confirms that.