After the First World War, Fretter-Pico was accepted into the
Reichsheer. He was first used in the 13th Artillery Regiment (). With the formation of the 100,000-man army, he then joined the staff of the 2nd battalion of the 5th Artillery Regiment; where he served until 1924 as a battalion
adjutant. In autumn 1924 he was transferred to the 6th battery of the 5th (Hesse-Württemberg) Artillery Regiment () in Fulda. In this unit he was promoted to
Hauptmann (captain) on February 1, 1928. On October 1, 1928, he was transferred back to the staff of the 2nd battalion of the 5th Artillery Regiment. From there, Otto was then ordered to the Army Department (T 1) in the
Ministry of the Reichswehr in
Berlin. In the spring of 1930 he was then assigned to the regimental staff of the 5th Artillery Regiment. On October 1, 1930, Fretter-Pico was transferred to the 7th (Bavarian) Medical Battalion (); being appointed adjutant in said unit on May 1, 1933. On October 1, 1933, he was appointed chief of the 2nd squadron of the 7th (Bavarian) Driving Battalion (). On September 13, 1934, he was recalled and briefly commanded the 3rd Battalion of the Munster Artillery Regiment until October 1, 1934, when he was transferred back to the Ministry of the Reichswehr, as inspector of the Artillery (Department In 4). On January 1, 1935, he was promoted to Major. He remained in service there when it was renamed the Reich Ministry of War () in the spring of 1935. On October 1, 1937, he was promoted to
Oberstleutnant (lieutenant colonel). As such, he was appointed commander of the 7th Observation Battalion () in
Ingolstadt, back in
Bavaria on November 10, 1938. While there, Fretter-Pico completed a course in
Jüterbog at the artillery school in January 1939. == World War II ==