The former Middlesbrough and England boss was handed a two-year deal to succeed Ian Holloway after the popular manager was sacked after only managing a 16th place finish in the Championship this season.
The spell will be McClaren's second at the club, having also worked under Harry Redknapp during his time in charge.
Speaking to the press, McClaren expressed his delight with the appointment, saying that he can't wait to sink his teeth into the task.
"The biggest challenge will be taking this club forward," he explained. "I was here five years ago and it was a good season, a good three months for me working with Harry [Redknapp]. But the dressing room needed sorting out.
"The last two years have been very good getting the house in order. On the field, I'm excited by the squad. That's the attraction for me.
"That's what I've missed. The coaching, the building of a team. This squad I believe is very good. It's young, energetic, enthusiastic, has got attitude and can play football.
"For me, it's the perfect fit. I can't wait to get started."
Meanwhile, the 57-year-old insisted that the current squad is capable of securing a play-off place next season, using other clubs with limited budgets as proof that he wasn't being unrealistic.
"It is not about big budgets, it's not about big players. Yes that can get you a certain way and that puts pressure on," he added.
"There are a lot of clubs like Millwall, Brentford and Bristol City who have proved that you don't have to have a massive budget to be a contender to get into the play-offs.
"That is the encouraging thing that I see about this club. It is probably at a stage where over the next year, we'll start going forward."
Finally, McClaren said that no hard and fast targets had been set for next season, saying: "None whatsoever. I've only been through the door two days.
"Targets have not been set but the priority is to win football matches which we will try to do every game. Try to do that in a certain style. I believe with this squad we can achieve that."