The deal is for one year, the source said, meaning Benjamin will be a free agent this offseason.
Benjamin, a first-round pick of the Carolina Panthers in 2014, had cleared waivers Wednesday after being released by the Bills.
He will serve as another weapon for the Chiefs, who head into Week 14 with an AFC-best 10-2 record.
Buffalo, which dropped to 4-8 with Sunday’s loss, had opted to evaluate younger receivers in recent weeks. Benjamin played between 40 and 58 percent of offensive snaps over the past three games after playing no less than 60 percent of snaps in the first nine games.
Benjamin has 23 catches for 354 yards and a touchdown this season.