Hiddink replaces Gadzhi Gadzhiyev, who was fired earlier this year.
He will earn a reported 8 million euros at the Russian side, who train in Moscow but play in the war torn region of Makhachkala.
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The reputation of the Premier League means it is the most popular and one of the most watched leagues in the world.
Five English clubs will compete in the last sixteen of the Champions League for the first time ever as Liverpool, Manchester United, Manchester City, Chelsea and Tottenham face some difficult away matches.