A hydraulic system is disclosed. The hydraulic system may have a pump, a hydraulic actuator, and first and second passages fluidly connecting the pump to the hydraulic actuator in a closed-loop. The hydraulic system may also have a control valve, and a load-holding valve configured to selectively lock movement of the hydraulic actuator. The load-holding valve may include a valve block at least partially defining a pump passage, an actuator passage, a control passage, a restricted passage connecting the actuator passage and the control passage, and a bypass passage connecting the actuator passage and the control passage. The load-holding valve may also include a valve element movable between a first position at which flow between the pump and the hydraulic actuator is blocked, and a second position at which fluid is allowed to flow between the pump and the hydraulic actuator, the valve element being spring-biased toward the first position.