The 42-year-old played for Real Madrid, Inter Milan, AC Milan and Barcelona in an 18-year playing career.
Valladolid are 16th in La Liga and yet to win a game this season.
“The arrival of Ronaldo puts Real Valladolid on the map and will allow the club to take a leap in quality,” said president Carlos Suarez.
Ronaldo scored 62 times for Brazil, including both goals when they beat Germany in the 2002 World Cup final.
Speaking at a news conference on Monday, he said: “I have gone through many stages in my training in football to prepare. Football is a passion.
“This new management will be defined by four words: competitiveness, transparency, revolution and social.”
Ronaldo won two La Liga titles with Real Madrid and the Uefa Cup with Inter. He was part of the Brazil squad who won the 1994 World Cup – although he did not play – and helped them reach the 1998 final.
He picked up the Ballon d’Or award for the best player in the world in 1997 and 2002.
Last month, he was admitted to hospital in Ibiza with pneumonia.
