The West Brom boss succeeds Fabio Capello after talks with the Football Association on Monday and Tuesday.
He will remain in charge of the Baggies for their last two games of the Premier League season.
The 64-year-old will lead his country after managing 18 teams, including three national sides, during a coaching career spanning 36 years.
"Let's hope we can get everybody behind us and make certain that we work as a team and help the team get the results everyone in England expects and wants," said Hodgson.
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