The former Real Madrid and Tottenham Hotspur manager replaces ex-Soviet international Vladimir Bessonov, who was sacked last month following a series of poor results.
"It will be a new experience. I have always thought the language of football is universal," Ramos, 56, said on his personal website.
"They have proposed a serious project to me, and personally I always find it attractive to discover new possibilities in this profession."
Dnipro had high hopes of challenging Shakhtar and Dynamo for supremacy in Ukrainian soccer this season but are third.
They won 3-0 at bottom side Metalurg Zaporizhya on Friday and after 12 games are five points behind leaders Shakhtar and three off Dynamo Kiev with both having a match in hand.
Ramos has managed several clubs in a wide-ranging career but his most successful spell was with Sevilla from 2005 to 2007 when they won back-to-back UEFA Cups and the King's Cup.
He moved to Tottenham and won the League Cup in 2008 but they struggled in the Premier League and he was sacked.
Ramos then had a six-month temporary role with Real Madrid leading them to second place in La Liga in 2009.
His last coaching role was with CSKA Moscow where he lasted only six weeks at the end of last year.
