'I'm delighted to have the opportunity to take the club forward," he said.
"Tranmere has been a big part of my life, as a footballer, coach and now manager. It means a lot to me that I have the chance to be the one who guides the club back into the Championship.
"We're not a million miles away from being a very good side at this level. With the right three or four new faces in this summer, hopefully we'll be a real force in the division."