I stayed at a ryokan in Yudanaka Onsen the other day. The private onsen bath was quite nice.
The elder owners speak only Japanese but the young manager (my friend) can speak a bit of English and he is very helpful. If you are looking for a real traditional ryokan near the Yudanaka Station, I would recommend the place. Yudanaka is the end staition of Nagano Dentetsu that comes from Nagano Station.
Also Yudanaka onsen is one of the hot spring places with convenient access to Jigokudani Yaen Koen (the Snow Monkey Park or Onsen Monkeys). Anyone interested in staying in the affordable ryokan with the old wooden building, check out his English blog site at http://ameblo.jp/yudanaka-seifuso/