Holland, who had five goals and five assists in 39 games last season, is expected to compete for the third-line centre job behind Tyler Bozak and Nazem Kadri.
The Leafs acquired Holland in November from the Anaheim Ducks along with Brad Staubitz for Jesse Blacker and second- and seventh-round picks. The trade happened when Toronto was so short on centres because of injuries and suspensions that James van Riemsdyk was moved there from left wing.
Holland, who was a restricted free agent, has 17 points in 68 career NHL games for the Leafs and Ducks. He was a first-round pick at 15th overall in the 2009 draft.
On his Twitter account, the Caledon, Ont., native wrote: "Super excited to sign a new deal with my boyhood team!"
It seems like I'm kind of making it a little difficult on myself here the last two games.
— Chicago Blackhawks forward Patrick Kane after tying the record for longest point streak by an American-born player with an assist on Duncan Keith's goal with 26.6 seconds left against the Anaheim Ducks Friday
TONIGHT ON NHL NETWORK
6:30 ET: Hockey Central Saturday: Hockey Tonight 7:00 ET: NHL Hockey: WSH @ TOR (Live) 10:00 ET: NHL Tonight