Hoilett, 22, joined on a four year deal after his Rovers contract expired but Rangers needed to pay a fee as the winger is under the age of 24.
They have avoided going to a PFA tribunal by agreeing to make an initial payment of £3m, which could rise by a further £1m based on appearances.
Hoilett has made three Premier League starts for his new club.
The Canadian initially joined Blackburn as a 13-year-old but spent time playing in Germany in order to gain a work permit.
He scored seven Premier League goals for Rovers last season but decided on a move when Rovers were relegated.