Holloway has revealed that Gayle was one of the club's main transfer targets this summer.
He told the Croydon Advertiser: "The chairman and I sat down and put a few proposals together once we had got promoted, we bounced a few names and ideas off, and I have to say, Dwight was absolutely at the top of our list.
"It's a big statement. I think he's going to be hungry, I think he's got pace, he wants to score goals, he's going to learn and he suits us. He's pacy, he's exciting, he's fresh. He's hungry with a capital H, I think. People might think that's not a good enough signing for us, for example, but I think he's a perfect fit.
"He is a very, very genuine lad who wants to get better. I am absolutely delighted I've got him."
Gayle scored 13 goals in 29 games for Peterborough last season.