I have used Toddler Formula... with my son. Enfamil.
As you said, just mix Formula with milk, then over time, lessen the ratio.
Over time. Not overnight.
I breastfed my son exclusively too.. until he self-weaned at about 1 year old. Then, he HATED whole milk. I gave him Toddler Formula (per Pediatrician okay), and would mix the Formula with milk.... then gradually lessening the ratio until it was all whole milk.
It was fine. (always mix the Formula according to the can, using water. NOT milk in place of water. THEN, add in the milk. Otherwise, the Formula will be too concentrated. Very important. )
My daughter however, went from breastfeeding exclusively, then straight to whole milk. No problem.
So you don't HAVE to transition from Formula to milk... you can just go directly to milk if your baby takes it.
All the best,
Susan