Advocaat, who stepped down as Netherlands coach last month, signed a contract on Monday to take over until the end of the season at Sparta, who sit joint bottom of the standings.
The 70-year-old played at Sparta for two seasons in the 1980s and his return was demanded by supporters after the team suffered five successive losses.
Alex Pastoor was fired after a 7-0 defeat by local rivals and champions Feyenoord on Dec. 17.
Advocaat stepped down as Netherlands coach in November after the team's failure to qualify for next year's World Cup in Russia.
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Advocaat has also managed the national teams of Russia, Belgium, Serbia, United Arab Emirates and South Korea as well as European clubs including Rangers, Sunderland, PSV Eindhoven and Fenerbahce.
(Reporting by Mark Gleeson in Cape Town; Editing by Ed Osmond)
