Ramalho bounces back at Palmeiras
"We are all happy with the arrival of Muricy who signed a contract until December 2010," Palmeiras president Luiz Gonzaga Belluzzo told the club's website.
Sao Paulo sacked Ramalho after their quarter-final exit in the South American Libertadores Cup at the hands of fellow Brazilian side Cruzeiro on June 18.
Ramalho was voted the country's best coach in the last four seasons, having also steered Internacional to second place in the Brazilian championship in 2005.
He had been an exception in Brazil, spending so long in one job after his appointment at Sao Paulo in January 2006.
He finally got caught up in the merry-go-round of coaching changes, however, and now replaces Vanderlei Luxemburgo, sacked by Palmeiras last month and who took charge of Santos this week.
Palmeiras have for the last month been under caretaker Jorginho, winning their last four matches to stand joint top of the championship standings, with fans calling for the interim coach to be confirmed in the job.
Ramalho will take charge next Monday after the team's derby against Corinthians.