Beale was previously assistant at Ibrox under Steven Gerrard before he and the latter departed for Aston Villa in November 2021.
Beale then left Villa for Queens Park Rangers in the summer but has made a swift return to Glasgow, signing a contract until the summer of 2026.
Beale replaces Giovanni Van Bronckhorst, who was sacked last week after an underwhelming start to the season.
Van Bronckhorst paid the price for an underwhelming start to the season for Rangers which has seen them finish bottom of their UEFA Champions League group with zero points and a goal difference of -22 while domestically they have fallen nine points behind Celtic in the title race.
Speaking after the announcement of his appointment, the 42-year-old Beale said: "It is fantastic to be back and to see everybody this morning, there are some new faces but some people that I know really well so it is great to see everyone.
"I am hugely proud, it is a wonderful, wonderful football club, it is an institution.
"For everyone that works here it is a huge privilege, but to be the manager of this football club, that is extremely special.
"Some wonderful people have sat in this chair prior to me, and I am hugely proud to be the person sat here now."
Sporting director Ross Wilson, added: "I am pleased to welcome Michael back to Rangers. I know how excited he is about everything that comes with the prestige of being Rangers manager.
"Equally our players and staff at both the training ground and at Ibrox are looking forward to working with Michael. He has a clear plan and will get to work with the group straight away along with the technical and support staff.
"Finally, this is a coveted managerial position and after an intense week of discussions, I wish to extend our sincere thanks to all of the excellent managers who we met to discuss the role."
