Estrada's deal was worth US$3.9 million while Saunders will earn $2.875 million.
Also Friday, the Blue Jays signed infielder Munenori Kawasaki to a minor-league contract with an invite to spring training and outrighted right-hander Cory Burns to triple-A Buffalo.
Estrada, a 31-year-old right-hander, was 7-6 with a 4.36 earned-run average last season with the Milwaukee Brewers. The Blue Jays acquired him Nov. 1 in a trade for first baseman Adam Lind.
Estrada made 18 starts and 21 relief appearances last year, when he made $3,365,500. He is 23-26 with a 4.23 ERA over seven seasons with Washington and Milwaukee.
Saunders, a 28-year-old Victoria native, was acquired Dec. 3 in a trade with Seattle. The Mariners picked up pitcher J.A. Happ in the deal.
Saunders made his major-league debut with the Mariners in 2009 and spent parts of six seasons with the team. He earned $2.3 million in an injury-plagued 2014 season, when he hit .273 with eight homers and 34 RBIs.
Over 553 career big-league games, Saunders has a .231 average with 51 homers and 182 RBIs.
Kawasaki hit .258 and had 17 RBIs in 82 games with the Blue Jays last season. Burns spent last season in the minor leagues at the double-A and triple-A level.