The deal Tuesday keeps Holzer under contract with the NHL club through the 2014-15 season. Holzer will make $1.575 million total -- $725,000 in 2013-14 and $850,000 in 2014-15 -- a source told ESPN.com's Pierre LeBrun.
The 25-year-old Holzer has appeared in 16 games with Toronto this season. He has two goals, 19 penalty minutes and is tied for third on the team in blocked shots.
Holzer is from Munich and has represented Germany internationally, including the 2010 Vancouver Olympics.
Toronto selected Holzer in the fourth round of the 2006 NHL entry draft.
Information from ESPN.com's Pierre LeBrun and The Associated Press was used in this report.