The Twins can DFA him now and still invite him to spring training next year. He'll be around. I believe DFA rules would mean the Twins would have to cover (most of) the salary this year if someone picks him up, but not in additional years. This means no one will pick him up.
2017 can be the year that teams jettison terrible players. Boston cut Sandoval with $50M left on the deal. Hughes and Sandoval are roughly equally bad, the difference being that Sandoval was incredible in the playoffs.
Nobody would claim him on waivers but somebody might pick him up since that team would only have to pay the MLB minimum and the Twins pay the remainder of his salary.
The only reason to DFA him is to keep the likes of Belisle, Murphy, Haley, Gee or a few others on the 40 man roster. Hughes looks bad but he still has more of a future than that crew.