Phaneuf was acquired in January in a blockbuster deal with the Calgary Flames. He had 10 points in 26 games with the Maple Leafs.
Toronto coach Ron Wilson has said the 25-year-old Phaneuf provided a healthy influence on a team with many young players.
The Maple Leafs were last in the Eastern Conference last season.
Phaneuf immediately made an impact upon arriving in Toronto. He threw his weight around, dropped the gloves to fight when necessary and chewed up lots of minutes in ice time.
He also gave the team a vocal presence on the ice and in the dressing room.
"Our practices -- it was like going to a church service before he got here," general manager Brian Burke said. "You'd go a whole practice and no one would yell at anyone, no one would yell for the puck."
Phaneuf said he learned a lot from Flames captain Jarome Iginla when they were teammates. He added he hopes to follow the example set by Iginla and former NHL captains Mark Messier, Scott Stevens and Wendel Clark.
"You look at how they play the game and how they lead," Phaneuf said. "I think the best way to lead is you don't have to be the loudest guy, but you definitely want to be the guy who is working the hardest day in and day out.
"That's what I'm going to bring to our team. I want to be known as the guy who works the hardest."
Burke said he liked how Phaneuf would 'bark' at guys on the ice and give them encouragement or instruction.
"We had such a quiet group, and the first day Dion got here, there was a dramatic difference," Burke said. "Because once one guy starts talking, then other guys start talking. I think it made a huge difference in how we played and practiced."
Phaneuf is the 18th captain of the Maple Leafs and the 22nd in Toronto franchise history.
Burke said he liked how Phaneuf doesn't hesitate to voice his opinion -- even with the GM. He recalled one conversation shortly after Phaneuf's arrival last season.
"He thought we got pushed around in a game and came right out of the dressing room and barked at me on the way to the weight room: 'We need some bigger forwards in here,' and kept walking," Burke said. "I haven't had too many guys bark at me like that. I didn't mind it, and he's right. We do need some bigger forwards."
Wilson said he is confident Phaneuf is the right choice to lead the Leafs.
"When we actually picked up Dion, that was something that we talked about -- here's a potential captain candidate," Wilson said. "We have a few on our team, and when we saw how Dion affected positively the attitude in our room, the attitude at the practice facility, how he integrated himself into the community and did all the little detail things that you would expect from a captain, to me it was a no-brainer."