Since taking over as Red Wings GM in July 1997, Holland, 58, has put together a team that has won more regular-season games (746) and postseason games (115) than any other NHL team.
"I'm proud of our 23 years of making the playoffs, and I'm excited about challenges going forward," he said. "We've been a team, the last two years, that's been a bubble team. I believe, if you get in and you get hot, it's wide open.
"Our goal going into 2014-15 is, hopefully, we can compete with the top teams in the East, with Boston and Tampa Bay, and Montreal, which went to the final four. We've got a tough division. We're trying to compete for a playoff spot, be a contender.
"At the same time, we're also trying to develop young players to build a core much like we did in late '80s, early '90s that carried us for a decade, and then again in the late '90s. I'm optimistic and excited about our younger players, that they will continue to develop into Detroit Red Wings players."
In a statement released by the team, owners Mike and Marian Ilitch cited Holland's success, saying that "Ken is regarded as one of the premier executives in the National Hockey League and has been instrumental in the success of the Red Wings over the last two decades. Marian and I are extremely pleased that he will continue to lead our hockey club over the next four years.
"We feel strongly that stability is key to the success of any organization, and having this new agreement in place with Ken is important to the organization and its future."