Following the sacking of Carlo Ancelotti, president Florentino Perez moved to bring him back to the Santiago Bernabeu and the 55-year-old is hoping to make a positive impact.
"It's an exciting day because I'm back home again," he said at his official unveiling.
"I hope to win titles and play well. This is the hardest part, when you have to speak but don't know what to say.
"It's a very exciting day for me. I promise to work with dedication. I hope we can repay the confidence placed in us."
Perez added: "The requirement in Madrid is always high and our new coach will make us stronger in our objectives, which are the dreams of Real Madrid.

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