Cushing tore his left anterior cruciate ligament in Monday night's 23-17 win over the New York Jets. The 6-foot-2, 242-pound Ruud was a second-round draft pick by Tampa Bay in 2005. He was cut by New Orleans, which acquired him in a trade from Seattle in the offseason, on Monday.
Ruud posted four straight seasons of more than 100 tackles from 2007 to 2010. Last year for the Titans he had 57 tackles in nine games.
Texans coach Gary Kubiak said he expects Ruud to learn Phillips' defense quickly.
"He's a veteran who's been in some systems somewhat similar to what we do," Kubiak said. "It gives us a little bit of flexibility going into game day."
Cushing posted a message on his Facebook page Wednesday, vowing to return "better than ever next year" and guaranteeing the Texans would win the Super Bowl.
"Trust me when I say that I'll be back better than ever next year; but in the meantime, I want to thank my teammates, coaches, and you fans for all the amazing love and support. Oh, and WE are STILL winning THIS year's Super Bowl," he wrote.
The Texans (5-0) play Green Bay (2-3) on Sunday.
The 5-foot-5 Holliday won a roster spot after returning three kicks for touchdowns in the preseason. But Houston ranks last in kickoff return average (17.6 yards) and 16th in punt return average (9.2 yards).
"By no means is it a statement or anything about what we thought of Trindon," Kubiak said. "We have not been playing up to par on special teams, giving returners the opportunity. That had nothing to do with it. You never know, our paths may cross again. But we wish him the best. He did a good job, he earned his way onto this team, but we had to make a tough decision."
Kubiak said fourth-round draft pick Keshawn Martin will take over punt and kickoff return duties, an area where he excelled at Michigan State. The 5-11, 190-pound Martin ranks second in school history in punt return yards (659), eighth in kickoff return yards (1,100) and 10th in all-purpose yards (4,013).
Martin has been working "heavily" on returning kicks for the past month, Kubiak said, and now he can make that his sole focus, with receiver Lestar Jean healthy again. Jean has missed the last two games following arthroscopic surgery on his left knee last month.
"We have a lot of confidence in him," Kubiak said of Martin. "In college, he was excellent at doing it. But we were working with four receivers for a period of time, with Lestar being out. So I was concerned, putting too much on his plate.
"If I'd thrown that (handling returns) on him, I just felt like I was doing too much to him too early," Kubiak said. "He's made a lot of progress, but the fact that Lestar's back and will be back, now we have five healthy receivers. So I feel like we can give Keshawn a little bit more."
The more immediate concern is filling Cushing's role. The 2009 first-round draft pick was not only the team's leading tackler this season (43), he was also one of the emotional leaders and most respected players in the locker room.
Tim Dobbins replaced Cushing on Monday night, and Kubiak reiterated on Wednesday that Dobbins is the best option to step into Cushing's spot. Dobbins played his first four NFL seasons with San Diego, including one season under Wade Phillips, now the Texans' defensive coordinator.
"It's a challenge for our team, that's what this is," Kubiak said. "We know Dobbins is going to go in there and play well, and every player in our locker room is going to take on a little bit more responsibility. So we're going to spread that responsibility around, everybody's going to take a little bit bigger piece of it, and we've got to respond."
Kubiak said RB Ben Tate (toe) practiced on Wednesday and is expected to play on Sunday. Tate sat out Monday night's game. ... S Quintin Demps (left forearm fracture) sat out Wednesday's workout. ... The Texans also signed G Cody White off the practice squad. The 603, 301-pound White is an undrafted rookie out of Illinois State.
Information from The Associated Press was used in this report.