Peat soils respond to drying/wetting cycles due to evapotranspiration and precipitation with reversible deformations induced by variations of water content in both the unsaturated and saturated zone. This process results in short-term vertical displacements of the soil surface that superimpose to the irreversible long-term subsidence typically occurring in drained cropped peatlands because of bio-oxidation of the organic matter. Yearly sinking rates due to the irreversible process can be comparable with short-term deformation rates (swelling/shrinkage) and the latter must be assessed to achieve a thorough understanding of the whole phenomenon. A mathematical model describing swelling/shrinkage dynamics in peat soils under unsaturated conditions has been derived from simple physical considerations, and validated by comparison with laboratory shrinkage data. The two-parameter model expresses the void ratio of the soil as a function of the moisture ratio. This approach is implemented in a model of subsurface flow in variably saturated porous media (Richards' equation), by means of an appropriate modification of the general storage term. The contribution of the saturated zone to the total deformation is modeled by the theory of primary consolidation, in the hypothesis of completely reversible compression and constant coefficient of compressibility. Simulations have been carried out for a drained cropped peatland south of the Venice Lagoon (Italy), for which a large data set of hydrological and displacement measurements has been collected since the end of 2001. The considered domain is representative of a field section bounded by ditches, subject to rainfall and evapotranspiration. The comparison between simulated and measured quantities demonstrates the capability of the model to accurately reproduce both the hydrological and deformation dynamics of peat, with values of the relevant parameters that are in good agreement with the literature.