We have constructed a compact and robust optical frequency standard based around iodine vapor loaded into the core of a hollow-core photonic crystal fiber (HC-PCF). A 532nm laser was frequency locked to one hyperfine component of the R(56) 32-0 127I2 transition using modulation transfer spectroscopy. The stabilized laser demonstrated a frequency stability of 2.3 10-12 at 1 s, almost an order of magnitude better than previously reported for a laser stabilized to a gas-filled HC-PCF. This limit is set by the shot noise in the detection system. We present a discussion of the current limitations to the performance and a route to improve the performance by more than an order of magnitude.