The honours were approved by councillors at a special Full Council meeting on Wednesday.
The RBL recently celebrated 100 years in Peterborough, while Mr Holdich stepped down from local politics in May after 44 years as a Conservative councillor.
Both have recently described their “honour” at being nominated for the most prestigious award which can be bestowed by the city.
Mr Holdich won his first election in 1977 in the old Minster (Central) ward on Cambridgeshire County Council, before two years later being elected onto Peterborough City Council.
During his long stint in local government he served as city council leader and mayor, while also holding various Cabinet positions.
He also served as a Glinton parish councillor from 1979 and as chair of governors at City College Peterborough for 42 years, while in 1996 he received an OBE from Prince Charles.
The motion to bestow the city’s highest honour on Mr Holdich put forward by Cllr Peter Hiller (Conservative, Glinton & Castor) and seconded by Cllr Mohammed Jamil (Central, Labour and Co-operative) added: “His enduring legacy will be the work in the formation and delivery of Peterborough’s new university.”
The motion for the RBL was put forward by Cllr John Fox (Werrington First, Werrington) and seconded by Cllr Mohammed Farooq (Conservative, Hargate & Hempsted).
It highlighted the huge contribution made by the charity over the past 100 years, including funding for four war memorials, huge amounts raised through the annual Poppy Appeal and representation at civic events.
The motion stated: “Over the years the branch has been extremely fortunate to have had lots of dedicated volunteers - a tribute should be paid to all of them.
“The logistical challenges are huge but they are ultimately raising funds for the welfare of our servicemen and women, and veterans.”
The meeting also saw Honorary Alderman status awarded to former councillors Chris Ash, David Seaton, Darren Fower and Diane Lamb, as well as Mr Holdich.
The nominations were made by the council’s Honours Panel.
Former councillors are normally chosen as an Honorary Alderman if they had been re-elected for at least three terms and served a minimum of 11 years.
They may attend and take part in civic ceremonies but will have no other formal role and will receive no money.