The former Bolton and Peterborough player joins from Scottish club Falkirk and the Shrews boss insists he is a versatile player who will be a good addition to the squad.
Simpson told the club's official website: "I am delighted to have managed to secure Dean's signature. He is a very versatile player who can play all across the back four and I am hoping he will cement the right-back position and make that his own.
"I had to move quickly to bring someone in after the departure of Darren Moss but I feel we have got a player who will be a real asset to the squad."
Holden, 29, began at Bolton where he played 13 league games before spells with Oldham, Peterborough and then two seasons north of the border with Falkirk.