The 32-year-old former U.S. international has played 207 regular-season games over nine MLS seasons — most recently with Chivas USA. That's 19 games more than Toronto's career franchise total.
Califf, whose next MLS start will be his 200th, is a vocal, spiky physical defender known for leading by example. He is hard to miss with a pair of tattoo sleeves and occasional mohawk and distinctive sideburns.
Earl Cochrane, Toronto's director of team and player operations, said Califf had already agreed to terms.
"He brings with him a vast history of experience and leadership and winning that I think is going to resonate really well in our locker-room," Cochrane said.
"He's looking forward to the challenge. He's looking forward to being a leader and a mentor to some of our younger guys. He's really excited about this."
Toronto (5-21-8) gave up a franchise-worst 62 goals in 2012. Califf will anchor the defence with 25-year-old Irish international Darren O'Dea, who signed on Aug. 3.
It is a measure of just how bad Toronto was last season that O'Dea has yet to win an MLS game with TFC.
Friday's draft was the second stage of MLS' complicated re-entry process.
Maicon Santos, a former TFC striker who was with D.C. United last season, was the only player taken in the first stage of the draft last week. He went to the Chicago Fire.
The second stage of the re-entry draft allows club more flexibility in negotiating with players.
Califf made US$275,000 last season and was one of three big-ticket players made available by the Goats. The others were 37-year-old Colombian striker Juan Pablo Angel ($600,000) and 33-year-old Venezuelan forward Alejandro Moreno ($195,000).
Chivas, under new ownership and management, also put up midfielder Peter Vagenas ($85,000).
Toronto freed up salary space earlier in the week by trading Jamaican international forward Ryan Johnson to Portland, a deal that also netted TFC allocation money to help pay down salaries.
Toronto made inquiries about Califf earlier in the year when the Philadelphia Union was shopping him.
"We had a conversation with Philadelphia," said Cochrane. "I think what we were going to have to give up was probably going to be too much for us. But we were interested."
Chivas was also interested and Califf, a California native, reportedly asked then-Philadelphia manager Peter Nowak to send him to Los Angeles-based Chivas.
"I called Peter back later and said, 'Nothing against Toronto, but if you have to trade me, please just don't trade me to Toronto. ... If you're looking at Toronto or L.A., it's a bit of a no-brainer, considering this is where I'm from," Califf was quoted by ESPN at the time.
The Union traded him to Chivas in May for midfielder Michael Lahoud and allocation money.
Califf started in MLS in 2000, spending five season with the Los Angeles Galaxy — winning the MLS Cup in 2002 — before being traded to San Jose.
His commitment was shown by the fact that as a rookie he played for the Galaxy just hours after getting married.
"He didn't want to ask if he could have the game off," wife Erin told mlsssocer.com in 2011. "He was afraid he'd lose his spot."
He played in Europe from 2005 to 2009 with Denmark's Aalborg BK and FC Midtjylland. He was acquired by the Philadelphia Union in December 2009 and named the franchise's first captain.
Toronto president Kevin Payne called Califf a "proven defender in our league, and a player with a lot of character."
Character is a quality Payne has emphasized since taking over the franchise late last month.
Canadian international defender Ante Jazic, who played with Califf at Chivas this season, calls the veteran "a great leader in the locker-room."
"He does a great job organizing a backline with all of his experience from Europe. I'm sure the younger players will benefit having Danny in the lineup," Jazic said by text.
Califf has won 23 caps for the U.S. from 2002 to 2009 and has skippered the squad.
Teams have seven days to make an offer to players taken in the second stage of the draft. If an agreement can't be reached, the club has the right of first refusal for that player in MLS.
Clubs may pick their own players in the second stage draft if other clubs have ignored them.
Players not selected are available on a first-come-first-serve basis.
Montreal, in the No. 8 spot, was one of nine teams to pass in the first round Friday.
Vancouver, picking 10th, selected former Real Salt Lake forward Paulo Junior.
The 23-year-old Brazilian had two goals and two assists in 22 appearances (12 of them starts) for RSL in 2012. The five-foot-seven striker also spent time on loan with the Fort Lauderdale Strikers of the North American Soccer League.
D.C. United, picking in the 17th spot, took veteran midfielder John Thorrington, who played in 19 games (14 starts) for Vancouver this season.
All three Canadian teams passed the remaining three rounds.
Former Toronto FC midfielder Eric Avila was chosen sixth overall by Colorado while TFC defender Ty Harden went to San Jose in the second round.
Avila and Harden are among 10 TFC players who have left the club since the end of the season. Coming the other way are forward Justin Braun and goalie Joe Bendik.
In related news, Toronto FC re-signed defender Jeremy Hall and forward Andrew Wiedeman. Both had been on the first stage re-entry list.
Former Toronto FC defender Adrian Cann was not taken in the draft. Cochrane said Toronto was not interested in re-signing Cann.
The defending champion Los Angeles Galaxy took Houston midfielder Colin Clarke after moving up to second in the draft in a trade with Chivas.
In third spot, Portland passed. The New England Revolution selected forward Chad Barrett, a former TFC striker currently on loan to Norway's Valerenga from the Los Angeles Galaxy.
Philadelphia then chose former Rapids striker Conor Casey.
Of the 14 players selected, six were former TFC players: Avila, Barrett, Casey, Hunter Freeman (to New England), Dan Gargan (to San Jose) and Harden.
Away from the draft, the Galaxy traded forward Edson Buddle — another TFC alumnus — to the Colorado Rapids for allocation money and Colorado’s first round pick in the 2013 MLS supplemental draft.