The 30-year-old, who was born in Scotland, was part of the United States World Cup squad in South Africa in 2010.
After moving from Major League Soccer's Houston Dynamo to then Premier League club Bolton in 2010, Holden suffered a serious left knee injury in a game against Manchester United in March, 2011.
After a long road back to fitness, Holden played for the United States in the 2013 CONCACAF Gold Cup but suffered a torn ACL (anterior cruciate ligament) in his right knee and another comeback attempt, on loan to Sheffield Wednesday, ended with a further injury to that knee.
"It's time to stop fighting my body. I have known for a while but I've struggled to admit to myself and others. The countless sleepless nights, the aches and the pains and the constant mental battles were all signs pointing to a new path," Holden said in a statement published on the U.S. Soccer Federation's website.
Holden has recently been working as a television pundit and this week became a father.
(Reporting By Simon Evans; Editing by Rex Gowar)
