The 73-year-old had been without a club since leaving Middlesbrough in November last year.
Warnock holds the record as the manager with most promotions in English football with eight, including three promotions to the Premier League with Sheffield United, Queens Park Rangers and Cardiff City.
Warnock managed 16 clubs in a coaching career spanning 42 years.
"I just thought it was the right time, really, coming towards the end of the season, there's not really a job you're going to get before then," he told Sky Sports.
"I've had a good run really. I'm enjoying things I've not done for years, I'm having a lot of time with the family, my dogs and I've taken up cycling too.
"I'm not saying the enthusiasm's gone, I've not lost that, but when I see some of my friends who are struggling health wise, there comes a time where you have to let your family enjoy a little bit more of your time, in particular my wife Sharon.
"When you're a manager you're very selfish, you take your job home with you whether you're on a high or a low and it's very difficult for your wife and kids.
"It's hard to replicate the final whistle when you've won a game, there's nothing quite like that in normal life, and you have to realise you're not going to get that buzz again in that situation. But I'm doing a couple of evenings in the theatre, and I imagine I'll still be nervous before them!"
