The 55-year-old former Chelsea and Valencia coach replaces Stefano Pioli, who was sacked following Sunday's 3-0 league defeat at Roma which left Parma second from bottom.

Pioli is the seventh Serie A coach to be fired this season.

Ranieri returns to coach in his native Italy after an absence of nearly 10 years.

After spells at Cagliari, Napoli and Fiorentina, he left Italy in 1997 to coach in Spain and spent two years at Valencia and one at Atletico Madrid.

He then moved to England to take charge of Chelsea where he spent four years and took the London club to the semi-finals of the Champions League in the 2003-04 season.

Ranieri was sacked by Chelsea's Russian billionaire owner Roman Abramovich in May 2004 and was replaced by Jose Mourinho.

A month later Ranieri rejoined Valencia for a second stint, but was sacked the following February after the club were knocked out of the UEFA Cup.

He then returned to Italy to work as a television pundit.