The 43-year-old Lennon spent four seasons in charge of the Scottish side in which he won three league titles and two domestic cups.
The Northern Irishman also led Celtic to famous Champions League victories against Barcelona and Ajax Amsterdam before leaving the Glasgow giants in May.
"The club are delighted and excited to appoint Neil Lennon," Bolton said in a statement on their website (www.bwfc.co.uk).
"He brings with him experience at the highest level and an infectious enthusiasm to take the club forward."
Lennon, who replaces Dougie Freedman at Bolton, will be joined by assistant manager Johan Mjallby and first-team coach Garry Parker.
Bolton are bottom of the table with five points having won just one of their opening 11 games.
(Reporting by Tom Hayward, editing by Ed Osmond)
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