Jose returns for third spell at Al Ahli
Jose, 64, who won four African Champions League titles in his previous two spells in charge of the continent's most successful club, replaces his former assistant Hossam Al Badri.
Al Badri resigned in November after Al Ahli were eliminated in the semi-finals of the Champions League. He had been in charge from mid-2009 when Jose left at the end of his previous contract.
The immediate task for Jose, who has coached Sporting Lisbon, Benfica, Boavista and Belenenses, will be to cut the six-point lead held by Al Ahli's arch-rivals Zamalek in the Egyptian premier league.