He will take temporary charge alongside Brian Flynn, however it is unlikely to become a permanent appointment.
Doncaster Rovers chairman John Ryan has revealed he currently has a list of six potential candidates to replace Saunders, one of whom is currently in employment, and hopes to appoint a replacement by next week.
Saunders quit Doncaster on Sunday to take charge of the Championship strugglers, who sacked Stale Solbakken after their FA Cup exit at the hands of Conference side Luton.
A compensation package has been agreed between Doncaster and Wolves.