The former Blackburn midfielder has recorded a win, a draw and a loss since taking charge of the first-team squad and the German believes his new boss has had a tough start
The 44-year-old was placed in temporary charge of first-team affairs at White Hart Lane after Andre Villas-Boas paid the price for a series of inconsistent performances, before being awarded a permanent 18-month deal on Monday.
Sherwood himself admitted the club had taken a "gamble" by appointing him, but refuted suggestions he is merely a stop-gap until the club find a more high-profile candidate.
A 2-1 defeat to West Ham in the Capital One Cup was followed by a victory over Southampton and a draw with West Brom in an uncertain opening three games with the former midfielder in charge.
But Holtby believes that the squad are responding to Sherwood's methods, and praised the calming influence he has had on the team.
"The gaffer is new in and he is trying to put his thinking into the team and we have to stick behind that," the Germany international said.
"We have to put 100 per cent dedication to that. I think he has a good opinion of football and his style of play is nice.
"He likes to play forward attacking football. We need to give him some time because it's not easy coming into a hectic phase of a club when you have a Christmas period.
"You don't have much time to train. All the credit to him - he has calmed things down. The things he has tried to bring to us, they are really working."
Tottenham welcome Stoke City to White Hart Lane on Sunday, looking to arrest a run of four home matches without a win in the Premier League.