Please refer to this answer. When adding controls, browse to the WP Toolkit folder. For your convenience, the specific answer is copied to here as following:
In my windows 8 machine it usually points to
your project where WPToolkit is installed
[WPtoolkit.4.2013.08.16\lib\sl4-windowsphone71\Microsoft.Phone.Controls.Toolkit.dll]
Please note, Although, I have chosen a WP8 project, I had to choose the 7.1 dll to make to add it to the Toolbox. the wp8 folder failed to add.