The 59-year-old Italian has signed a contract until June 2018 with the Spanish club, becoming their ninth coach since 2012.
"My aim is to find a balance which is currently lacking," Prandelli told a news conference on Monday at the Mestalla stadium.
"I want to transmit to the players the values of this club.
"For me it's an honour to be in such a glorious club and we want to take it back there."
Valencia are 18th in the La Liga standings with six points from seven games.
They fired Pako Ayestaran two weeks ago after he had the worst record of any coach in the club's 98-year history, taking 10 points from 12 games after taking over from Gary Neville in March.
Neither Ayestaran nor Neville had any coaching experience, which is in stark contrast to Prandelli, a former Fiorentina and Italy coach.
During his five-year spell at Fiorentina, Prandelli guided the team to fourth place in Serie A and to the round of 16 in the 2009-10 Champions League.
He led Italy to a runners-up finish at Euro 2012 before resigning after the team's first-round exit at the 2014 World Cup.
He coached Galatasaray before leaving the Turkish club in November 2014 and has not managed a team since.
"Having spoken to (Valencia sporting director Jesus Garcia Pitarch) Suso, here there is a very interesting football project that attracted me," Prandelli said.
"I met with (Valencia owner) Peter Lim, he seems distant from the club but he is not. He is a businessman who has a long-term project for Valencia and that includes winning."
Prandelli, in the stands for Valencia's 2-0 home defeat by Atletico Madrid on Sunday, is upbeat.
"I'm optimistic because there is an interesting technical base," he said.
Valencia sold Spain forward Paco Alcacer to Barcelona in the summer and have scored nine goals in seven games since.
"We just have to attack with more players and create more goalscoring chances," Prandelli said.
"I'm convinced that if we're able to have a team mentality, this group can improve a lot. We need to stick to several clear ideas which I think is what this team needs."
(Editing by Ed Osmond)
