ESPN's Adam Schefter was the first to report the agreement.
Smith is the fifth of the Ravens' own free agents to agree to return, following tight end Dennis Pitta, left tackle Eugene Monroe, wideout Jacoby Jones and special-teamer Jeromy Miles.
Smith, 32, was easily one of the most important members of the Baltimore defense a year ago, emerging as a more than adequate replacement for retired linebacker Ray Lewis. Smith led the Ravens with 123 tackles and ranked third on the squad with five sacks in his first year after being signed away from the Jaguars. That helped Baltimore rank 12th in the league in both total and scoring defense.
Smith initially came aboard on a bargain deal following a 2012 season where he was limited to two games because of injury. He proceeded to start all 16 games for Baltimore in 2013, and now will continue to man the middle of the Ravens defense.
Update: The Ravens have officially announced the agreement, and general manager Ozzie Newsome issued a statement about the move.
"There are a lot of smiles around the building today after we got a commitment from Daryl Smith to stay a Raven," Newsome said. "He fills a need for us at a high level. Just look at his production last season, plus he gave us leadership and maturity. He's tough, he's consistent, he's intelligent, and he brings his lunch pail to work every day."