Barton was unhappy with reports of comments that Holland had made about him on an English radio station.
After mocking Holland's playing ability, the Liverpudlian then moved on to the issue of his international allegiance, saying: "If you're English, you play for England. If you're English and sh*t you pretend your Irish grandparentage matters to you and play for Ireland.
"I'd rather have my one England cap and be forever yearning more than take somebody from that countries chance away."
Holland, who qualified for Ireland through a Monaghan born grandmother, declined to get involved in the scrap, and merely asked Barton to listen to the observations that prompted the outburst.
Nevertheless, Barton's comments clearly ruffled a few feathers, although it is nothing new for the 29-year-old who has used the social networking site to offer a range of opinions.
McLoughlin -- who famously scored the goal in Windsor Park that booked Ireland's place in the 1994 World Cup -- took a dim view of Barton's theory.
The Manchester-born midfielder won 42 caps for Ireland and now works in the academy at Portsmouth. He was eligible because of a Cork born grandmother.
"If I'm honest, I take no notice of what Joey Barton says," he told Newstalk yesterday. "I take notice of people that I respect within the sport and respect within the wider community and Joey Barton isn't one of them people.
"It's a cheap shot, it's the usual shot you get when people get backed into a corner or want to react. It's old hat, we've heard it all before and we'll hear it all again.
"This comes from an uneducated person who is spending more time on Twitter and concentrating on that than he is on his own game. His own game needs to improve vastly and he might get another cap.
"But at the end of the day, Joey Barton is what he is.
"He's playing in the Premiership, but he's got enough baggage elsewhere which would concern me rather than what he says about the reasons why I played for Ireland, or the reasons Matt Holland played for Ireland, or anyone else. We've played for Ireland because the rules allowed that."
However, McLoughlin added that, in his own case, there was a choice between the two countries. And he also pointed out that England have also used the services of players born elsewhere: "Joey Barton needs to get his figures right.
"I mean, England did have a player, a fantastic player, that's John Barnes who was born in Kingston, Jamaica. He should have played for Jamaica. But that gets lost in the big scheme of things.
"I actually had a choice myself to play for England 'B' or play for Ireland 'B' ... I got two letters through my door that allowed me the option. I took the option to play for Ireland, and I enjoyed every minute of it. I was honoured."
Paul McGrath also weighed into the debate last night, aiming a tweet at Barton, who vowed to take a week-long sabbatical from Twitter after his thoughts were met with a backlash.
"I disagree," said McGrath, "I was born in London, asked to play for England by Bobby Robson, but respected my Irish roots and never regretted it."