The team bought some additional time Friday, agreeing to a $23 million, two-year contract that avoided arbitration.
"This is the first step in a process we hope will lead to a long-term relationship with him," Rockies general manager Dan O'Dowd said.
Holliday, the National League MVP runner-up, hit .340 last season with 137 RBIs, becoming the third player since 1967 to lead a league in both categories. He also had 36 home runs and led the NL in hits (216), total bases (386) and doubles (50) as he helped the Rockies to their first pennant.
Holliday, who turned 28 three days ago, also earned the NLCS MVP award after hitting .333 with two home runs and four RBIs in a four-game sweep of the Arizona Diamondbacks.
After making $4.4 million last season, Holliday gets $9.5 million this year and $13.5 million in 2009.
Colorado outfielder Willy Taveras agreed to a one-year deal worth $1,975,000. Taveras can make $150,000 in performance bonuses: $50,000 each for 500, 550 and 600 plate appearances.
Taveras, 26, provided speed at the top of the lineup for the Rockies last season. He hit .320 and stole 33 bases in 97 game for Colorado last season.
"We are excited to come to agreements with both Matt and Willy," O'Dowd said.