A Ukrainian man being held over bomb attacks on three mosques has also been arrested on suspicion of murdering an Asian pensioner.
Police say they are treating the stabbing of 82-year-old Mohammed Saleem as “a further act of terrorism”.
Mr Saleem was stabbed in the back in Green Lane, Small Heath, Birmingham on 29 April as he made his way home from a local mosque.
West Midands Police said the suspect, aged 25, was arrested on Saturday afternoon in relation to the murder, which took place nearly a month before the murder of Drummer Lee Rigby in Woolwich.
He was already in custody along with a 22-year-old man, also a Ukrainian national.
The men were detained in Small Heath on Thursday by detectives investigating explosions at mosques in Walsall, Wolverhampton and Tipton between 22 June and 12 July.
Counter-terrorism officers were granted extra time on Saturday to question the Ukrainian nationals in connection with the explosions.
The family of Mr Saleem have been told of the arrest.
The murder of Mohammed Saleem now forms part of the wider West Midlands Counter Terrorism Unit Investigation. Asst Chief Con Marcus Beale
Assistant Chief Constable Marcus Beale, who is leading the investigation, said in a short statement: “The murder of Mohammed Saleem now forms part of the wider West Midlands Counter Terrorism Unit Investigation.”
The stabbing of Mr Saleem, a highly-regarded and well-known figure in the local community, was described by detectives at the time as a “despicable” attack on a defenceless pensioner.
A joint family statement read during a press conference at West Midlands Police headquarters on 2 May described Mr Saleem as “a much-loved and respected community member”.
It is shocking that Mr Saleem’s brutal murder may have occurred as an act of terrorism. Shabana Mahmood MP
Labour MP for Birmingham Ladywood, Shabana Mahmood, said: “It is shocking that Mr Saleem’s brutal murder may have occurred as an act of terrorism – and it is vital that the community continues to support the police as they progress their investigations.”
A sitting of Westminster Magistrates Court granted officers up to seven days to question the men, who were initially detained on suspicion of being involved in the commission, preparation or instigation of an act of terrorism.
Following the men’s arrest, debris was found on a roundabout near Wolverhampton Central Mosque. Police believe it came from a device that exploded on the city’s Fiveways roundabout on 28 June.
The remnants of a home-made explosive device were found outside a mosque in Walsall on 22 June, and another device, containing nails, exploded near a mosque in Binfield Road, Tipton, on 12 July. No-one was injured by any of the explosions.