Here's the web site for the hotel Felice mentioned, Hostal del Cardenal: http://www.spanishparadores.com/hostaldelcardenal.html and two others you can consider: Hotel Abad: http://www.spanishparadores.com/hotelabad.html and Hotel Ciuded de Toledo: http://www.spanishparadores.com/hotelciudaddetoledo.html (FYI, I have no personal knowledge of any of these).

Cheers! Linda