The 43-year-old gets the hot seat at Meadow Lane after Craig Short was sacked after disappointing results at the start of the season.
Chairman Ray Trew told the club's official website: "Paul has a wealth of experience as a player and a solid track record as a manager in the Football League, making him the obvious choice for me.
"There were a number of high-calibre applications for the position and it was encouraging to see just how attractive a proposition managing Notts County remains to some very prestigious names in the world of football management.
"However, when we met Paul it quickly became clear that he was the ideal candidate, he'd done his homework, had some big ideas and was ready to get stuck in straight away."