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The guy just has this incredible presence and can build maximum tension with minimal movement - that's not something you're born with, it's pure craftsmanship. He did theater for years before he made it big, and you can tell: when the man speaks, you listen, even if he's just sitting in a chair. Then Tarantino came along and needed exactly that - an actor who can play villains so intelligently and fascinatingly that you almost like them. Since then he's obviously everywhere and gets the good roles, but the foundation was really this technical skill.
To be honest, I'm not that familiar with his early career years, but from what I can tell, he just took his time and worked on his roles instead of trying to become famous quickly. The breakthrough came with Tarantino films, where he played really charismatic villains that made him known worldwide. It was probably the combination of solid craftsmanship over the years and then getting exactly the right roles at exactly the right time.
His career really benefited from breaking through relatively late - not until his mid-50s in Hollywood. That sounds like a drawback, but it was actually his advantage: he'd already built a solid theater career in Austria and Germany beforehand and had developed extraordinary technical skill before the big roles came along. A lot of actors have to learn how to work subtly; for him it was already routine. Then there was probably a bit of luck involved too - meeting Tarantino, who needed exactly that kind of intense, minimal performance style - but without all those years beforehand, he wouldn't have been able to pull off those roles in the first place.
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