Kotsay was acquired by the Red Sox on Aug. 27 in a waiver deal with the Atlanta Braves, and he wound up starting all seven games of the American League Championship Series following the right hip injury to Mike Lowell.
The Boston Herald reported the re-signing of Kotsay for $1.5 million plus incentives late Thursday night, but the Red Sox aren't expected to announce the deal until Kotsay takes a physical next week.
Not only will Kotsay fill in at first, but he also provides depth in the outfield, his primary position during his career.
Kotsay's ability to play the outfield is particularly important considering the fact that Rocco Baldelli -- who is taking medication for an ailment that causes excessive fatigue -- is the team's fourth outfielder.
In 22 regular-season games with the Red Sox, the 33-year-old Kotsay hit .226 with no homers and 12 RBIs.
For his career, Kotsay is a .281 hitter with 109 homers and 609 RBIs.
Aside from valuing Kotsay's versatility, he won over teammates and manager Terry Francona for his highly-professional makeup.
In the span of a week, Epstein has reached deals with Baldelli, John Smoltz and Kotsay.
The signing of right-hander Brad Penny -- who agreed to terms shortly after Christmas -- could be announced as early as Friday.
Smoltz's deal is expected to be announced next week. The Red Sox unveiled Baldelli at a Thursday news conference.
Catcher is the primary hole Epstein is still trying to fill, and negotiations are ongoing with longtime team leader and captain Jason Varitek.
Ian Browne is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.