Schreuder was Hoffenheim assistant coach from 2015 until January 2018 before transferring to the Dutch club.
"We are thrilled to confirm that Alfred Schreuder will be our new head coach," the Bundesliga club said. "Hoffenheim's former assistant coach returns to the club from Ajax in the summer and signs a contract through 2022."
The 46-year-old Schreuder has also coached Twente in the Netherlands.
"Alfred knows our structures and the majority of the squad," said sports director Alexander Rosen. "Through his outstanding expertise and his strategic and clear communication he also contributed in big part to the success of the team in past years."
Hoffenheim, who played in the Champions League group stage this season, are currently ninth in the Bundesliga on 38 points.
(Reporting by Karolos Grohmann; Editing by Hugh Lawson)
