"Franco is extremely well respected in the industry, possessing an extensive knowledge of players around the world," chairman Daniel Levy told the Spurs website.
"He will strengthen our football management team, particularly in the field of recruitment, working closely with [manager] Andre Villas-Boas and [technical co-ordinator] Tim Sherwood across all levels on the playing side."
Baldini, who left his post as AS Roma's general director earlier this month, played for Bologna, Bari and Pescara and was Fabio Capello's assistant when the Italian was England manager.
The 52-year-old was also sporting director at Real Madrid.
Tottenham finished fifth last season, just outside the Champions League places, to qualify for the Europa League.
Get the best features, fun and footballing frolics straight to your inbox every week.
Thank you for signing up to Four Four Two. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.