The 50-year-old, who represented the club 264 times and played an integral part of Walter Smith's trophy-laden spell in the 1990s, replaces caretaker manager Kenny McDowall, who departed earlier in the day on Thursday.
Rangers confirmed that McCall has met the players at Murray Park and Kenny Black will be his assistant manager after the pair forged a successful working relationship at Motherwell.
Capped 40 times by Scotland, McCall's managerial career includes a three-year spell at Bradford City before taking up the reins at Motherwell, where his four-year stay saw the club achieve two successive second-placed finishes.
McCall took his first training session on Thursday ahead of Saturday's Ibrox clash with struggling Livingston.
Rangers lie third in the Scottish Championship, behind Edinburgh duo Hearts and Hibernian.
