The 33-year-old, who finished second behind training partner Maria Mutola of Mozambique on Tuesday, had said she would make a decision on whether to run after speaking to her coach.
Holmes originally planned to compete only in the 1500, which starts on Wednesday, but switched to the 800 an hour before the deadline and won Britain's second medal of the championships.
"I came into these championships not knowing which event to do," Holmes told the BBC. "My training has been limited. After doing the 800 metres my coach didn't want me to do the 1500 as well."
