This is a great question, one that I can definitely answer from experience. Yes, yoga is an excellent form of exercise for toning your muscles. I have been a regular gym goer from the age of 15, doing mainly endurance weight training but also enjoying trying out all of the different classes, especially Pump. Since taking up yoga on a regular basis I have found that it is the best form of toning, as you work every major muscle group. I feel more toned, strong and fit now, at 52 then I ever have. Plus have the added benefits of improved balance, flexibility and peace of mind.
Yoga is pretty much a daily practice for me (well, I do teach it I hear you say!) but it doesn't always have to be a long session, even a 15min flow can give much needed benefits, warding off some of the common ailments as we age, things people tend to just regard as normal. Suffering from back and joint pain and/or balance issues are things you can help prevent. I believe aging does not have to equate with suffering from pain.