Holman was signed by previous manager Alex McLeish before he was replaced by Paul Lambert.
Herd told Villa's website: "I'm really forward to working with Brett and playing with him next season.
"I don't know him personally but I know he's a great player. He's proven that with AZ Alkmaar and Australia.
"He will definitely bring good things to the club. He's an attacking player and he can play anywhere - up front, wide, even in midfield - he's very versatile.
"But he's very good wherever he plays. He's had a good career so far and I'm sure that will continue with Villa."