The Championship side sacked Mike Newell earlier this month, after several poor results.
Luton are currently second from bottom in the Championship table.
He said: “I’m not daunted by the size of the challenge. I can only do my best and give it a go.
“I’ve come here for the long term. There’s a vision at this football club that excites me and it’s something I’m looking forward to.
“There are things happening at Luton that could turn the club into a major player again and I want to be a part of that.”
