The 31-year-old, who scored twice on his debut for the Major League Soccer outfit, made 364 first-team appearances during two spells at White Hart Lane.
However, he left the London club last month in a bid to strengthen his chances of winning a place in England's World Cup squad, having started just three Premier League matches this season.
"[USA midfielder] Michael Bradley took the same decision," said Defoe. "He was at Roma, but he wasn't playing much and he wants to play.
"At the end of the day, you need to be playing regularly and playing well to get into a World Cup squad. You can't be at a club where you're not playing.
"Playing for a big club like Tottenham for all those years - nine years in total - is something I'm proud of, but in life opportunities come along that you sometimes have to seize. This is a fresh start for me."
Defoe will make his home debut for Toronto later today when the Canadian franchise play host to DC United.