It looks like Peter Gammons was reporting that a deal had been set for weeks and was only waiting on a physical. Ryan had minor surgery in the offseason, so it makes sense that they would want to make sure he was healthy.
Ryan filled in well during the second half of 2013, and a reunion makes perfect sense. However, if Jeter is limited by injury again, like last season, Ryan won't be a very good replacement.
Ryan, 31, has never been a good hitter (71 wRC+), but his defensive prowess ranks among the best in the league. In only 152 innings at short, he saved four defensive runs and had a 12.7 UZR/150 as a Yankee. While he won't make up for Jeter's bat, he's ten times the fielder Jeter has ever been. If Ryan is healthy, we should be hearing about a deal soon as the Yankees look to get their bench in order.