The keeper, who started all seven matches for the host nation at the 2014 World Cup, joined the Canadian club in February and made seven league appearances.
"At Toronto FC we aspire to be internationally recognised as a leader in every aspect that involves our football club and to be a consistent contender for championships in North America," general manager Tim Bezbatchenko said in a statement on Friday.
"With this ambitious vision comes the need for acquiring players of great character that leave an impact both on and off the pitch. Julio Cesar is certainly one of those players."
Harry Redknapp's Rangers secured promotion by beating Derby County 1-0 in the Championship playoff final at Wembley in May.
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