According to the Houston Chronicle, Andy Pettitte will return to the Yankees next year:

Andy Pettitte, who contemplated retirement this winter, has told his good friends, a few former Astros teammates and some current Yankees teammates that he will return to the Bronx for the 2008 season.

Through people close to Pettitte, the Chronicle has learned that the veteran lefthander has told family members and teammates that he has decided to return to the Yankees in 2008.

…That wait is over, and the Yankees have been informed of the decision by Pettitte’s agent, Randy Hendricks.

When reached by telephone this morning, Hendricks, who was in route to Nashville for the start of baseball’s winter meetings today, confirmed that he has advised the Yankees that Pettitte will play for them in 2008.

Whoa. If this is true, it’s a very good thing. As for Johan Santana, it’s been a busy weekend of rumors. First, the Yankees officially included Phil Hughes in an offer, then the Red Sox countered. Now, Hank Steinbrenner wants to get something done quickly (re: today), otherwise, the Yankees are prepared to move on.

“This is not a bluff; it’s just reality,” the senior vice president Hank Steinbrenner said in a telephone interview Sunday night. “It’s a fact. The Yankees will not be used to jack up the price on people — whether by agents or other teams — ever again. That’s over.”

…”I don’t want to continue this dog-and-pony show, playing us against the Red Sox,” Steinbrenner said. “I’m not going to participate in that. This is our best offer. Minnesota knows it’s our best offer. Everybody knows it is.

“We need to get this done. If we don’t, I certainly won’t be upset about keeping Hughes and Cabrera. I definitely won’t. I don’t think Minnesota wants to be stuck negotiating with just one team.”
(Kepner, N.Y. Times)

First day of the Winter Meetings. Be sure and hit up Pete Abe’s blog for all the latest.