Peseiro, previously in charge of Egyptian club Al Ahly, became the ninth man to coach the 27-times Portuguese champions in the last 12 seasons since the departure of Jose Mourinho.
Porto, who have seen their stranglehold on the Portuguese lead loosened in the last two seasons, said in a statement that he had signed an 18-month contract.
As well as his native Portugal, the 55-year-old has coached 12 teams in Portugal, Greece, Romania, Saudi Arabia, United Arab Emirates and Egypt and spent one year as assistant to Carlos Queiroz coach at Real Madrid in 2003-04.
It is the first time Peseiro has taken charge of one of Portugal's big three teams since his unhappy experience with Sporting Lisbon when they missed out on both the league and UEFA Cup titles in dramatic style in 2005.
Level with Benfica with two rounds to go in the league that season, they lost 1-0 to their neighbours in their penultimate match and eventually finished third.
They were beaten 3-1 by CSKA Moscow in the final of the old UEFA Cup, despite playing in their own stadium and scoring first.
Porto won the Portuguese league nine times out of eleven between the 2002/03 and 2012/13 seasons, but saw arch-rivals Benfica walk off with the title in each of the last two seasons.
Porto are third in the league, five points behind Sporting,and were knocked out of this season's Champions League in the group stage.
Like Benfica, Porto's business model is based on buying young players, mainly from Latin America, developing and coaching them and then selling on for a profit several years later.
Although financially successful, it means they are frequently have to rebuild their team.
(Writing by Brian Homewood in Berne; editing by Justin Palmer)
