The 47-year-old, who has signed a three-year deal, has enjoyed previous spells at Swansea where he won Welsh league titles in 1992 and 1994 and the Welsh Cup in 1995. Ruddock has also been director of coaching at Leinster and coached at Ebbw Vale and Newport Gwent Dragons.
He was appointed Wales coach in 2004 and in his first season completed the Grand Slam in the Six Nations Championships for the first time since 1978. He received the OBE in the 2006 New Years Honours List.
"I'm delighted to be able to take up this exciting position with Worcester Warriors," said Ruddock. "This is a very ambitious club with significant goals for the future and it's a journey that I want to be part of and am excited about.
"I'm very impressed with what Cecil Duckworth and the board have achieved at Warriors in taking the club all the way through the lower leagues to holding their own amongst the rugby elite.
"I now want my arrival to take the club onto the next level and I already have thoughts and plans for our style of play to take the team forward.
"There is already a strong squad at the club but, like any set-up, we would always gain from some excellent additions and this is something I will be looking at.
"I have watched the team play and there is no doubt that we can develop the style of play in terms of winning games and playing quality rugby that people will enjoy watching in a similar vein to the Wales team that won the Grand Slam in 2005."
Worcester chairman Cecil Duckworth OBE said: "In Mike we have appointed a man that I know has both the credentials and talent to take this club onto the next level and our aim of European rugby.
"Mike has worked at the very highest level and has a fantastic reputation throughout the rugby world. We now look forward to new era at Sixways under his leadership."
During the last year following Mike's departure from the Welsh Rugby Union he has been working as the Commercial Development Manager at Acorn Recruitment, one of the UK's leading recruitment and training companies. Mike's role included developing key business accounts as well as delivering leadership and management training programmes for clients in England and Wales.
Matt Southall, Acorn's Managing Director said: "We knew that before too long the lure of a fresh rugby appointment would appeal to Mike, and we're delighted for him that he's accepted the opportunity with Worcester. Mike goes with our blessing; he's been a terrific asset for Acorn over the last year and he will continue to be a good friend of the company. Everyone at Acorn wishes him the very best."