The 33-year-old Holland was designated for assignment by the Arizona Diamondbacks last week. He was 1-2 with a 4.54 ERA and 17 saves in 22 chances this season.
Holland was 2-0 with a 0.84 ERA in 24 games for the Nationals last season.
Washington’s bullpen has struggled throughout this year. Its 6.05 ERA is the worst in the National League.
MLB Network first reported the Nationals’ agreement with Holland.
The Associated Press contributed to this report.