To place a call on hold on an iPhone 4, tap and hold the Mute button. Tapping the Mute button a second time returns you to the call.
The iPhone 4 Mute button is also the Hold button
While using the Mute button to hold a call isn’t exactly intuitive, at least the feature is still available. Hopefully Apple will figure out a way to let iPhone 4 owners use the hold feature in a way that’s a little more user friendly.