Sources told NFL Network that the Patriots gave the offensive coordinator a five-year contract with the deal eclipsing $4 million annually at one point.
McDaniels, 42, was named the Colts' new head coach on Feb. 6, but turned down the job hours later. The offensive coordinator entered the NFL in 2001 as a personnel assistant with the Patriots. He held that role until being promoted to quarterbacks coach in 2004. McDaniels became the offensive coordinator in 2006, before being hired in 2009 as the Denver Broncos' head coach. He was an offensive coordinator for the St. Louis Rams in 2011, but returned to the Patriots in 2012 for the same role.
The Patriots ranked NO. 1 in point differential and offensive yards last season. They also ranked No. 2 in points scored and in passing yards.
McDaniels has been employed by the Patriots for all five of their Super Bowl victories.