"He is a man linked to Juventus and to our story of success," a club statement said, adding he had signed a two-year deal.
The 42-year-old was the standout candidate after Bari coach Antonio Conte, the ex-Juve captain, and AS Roma's Luciano Spalletti announced they would be staying at their clubs.
Ferrara, a former Juventus defender and youth team manager, will step down from his role as an assistant to Italy coach and former Juve boss Marcello Lippi.
The ex-Italy international, who had never been a coach before, won seven Italian titles as a player and one Champions League with Juve in 1996 having started his career at Napoli.
"He is a young coach, who has gained managerial experience in recent years within the club and has an international outlook thanks to his work with the world champions," the statement added.
AC Milan appointed Brazilian Leonardo, 39, as manager on Monday and Juve have followed suit in naming a relatively young and novice coach.
This season Barcelona won the Champions League and a Spanish double in 38-year-old Pep Guardiola's first season in charge.
"I think Ferrara can be the Italian equivalent of Guardiola," Italy and Juve defender Nicola Legrottaglie told reporters. "He is ready for this great job."
Under Ranieri, twice European champions Juve finished third in Serie A in 2008 in their first season back in the top flight following their demotion for match-fixing.
They made a good start to the season just gone, beating Real Madrid home and away in the Champions League, but an alarming dip in form towards the end of the campaign threatened their place in Europe's top competition and Ranieri was sacked.
"The bitterness remains but it is all part of the game of football," Ranieri told Sky television earlier on Friday in his first public comments since his dismissal.
"I didn't expect it from a club like Juventus."
Juve have already recruited their former defender Fabio Cannavaro from Real Madrid and Brazilian playmaker Diego from Werder Bremen for next season, with other signings likely.
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