Peru have been without a boss since Bengoechea left his role at the end of 2014, but, with a friendly against Venezuela on March 31, Gareca has stepped into the role.
The former Argentina international – who has managed across South America during his career – will look to build on their five wins in the last seven matches during 2014 ahead the Copa America in June.
"I thank Juan Carlos [Oblitas, Peru Football Federation sporting director] because they trusted me with this role. It is an honour. I am very happy. It is the biggest challenge of my life," the 57-year-old said.
"Being in charge of a country that I love, which has treated me very well and where I had the opportunity to learn, is a huge responsibility.
"I accept this challenge, knowing that we expect a tough, complicated but not impossible task. Nothing is impossible when you believe.
"I believe in Peru's football team."
Peru finished third at the last Copa America in 2011, their highest finish since winning the competition in 1975.
