Moore replaces Grant McCann, who left to take over at Hull last month.
The 45-year-old has been out of work since being sacked by West Brom in March despite being fourth in the Championship at the time.
Rovers finished sixth in League One last season and lost out to Charlton in the play-off semi-finals.
Moore played more than 80 games for the club in the mid-1990s and was delighted to be back at the club.
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He told Doncaster’s website: “It feels really good to be back, having been here before as a player to be back as the manager is an honour for me.
“I’m looking forward to getting to know everybody around the place, the role really appealed to me given the Club Doncaster model currently in place.”
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