The former European Footballer of the Year was formally introduced as the team's sixth coach on Friday, succeeding Frank Yallop as the boss of a team which has failed to make the play-offs for two seasons in a row.
"We have signed a world-class coach and leader for this franchise, a soccer man who understands how the game is played and managed at the highest level." said team owner Timothy J Leiweke. "Ruud is an exceptional leader whose commitment, character and experience make him the perfect fit for our team and our organisation."
Gullit, 45, has previously managed English clubs Chelsea and Newcastle and the Dutch side Feyenoord.
As a player, he was twice named world player of the year. He joined AC Milan in 1987 for a then world record fee and, with compatriots Frank Rijkaard and Marco van Basten, helped the Italian club win the European Cup in 1989 and 1990. He also captained the Netherlands to victory in the European Championship in 1988.
He then played for Sampdoria and Chelsea, before starting his managerial career with the London club.
"I have always looked to take on important challenges and the opportunity to manage the LA Galaxy is an exiting opportunity at this stage in my career," said Gullit. "I want to play a major part in both bringing the club honours and helping to raise the profile of the game at home and on the world stage."
The appointment made Gullit the first coach of African descent in the MLS, but placed him in charge of a team in crisis and, unusually for the sport in the US, in the glare of the paparazzi cameras.
The Galaxy has failed to make the MLS playoffs the last two years despite an influx of new players in both seasons. The arrival of Beckham on a five-year deal worth a reputed 250 million dollars was supposed to catapult the team to the top of the league, and raise the profile of the game in the US.
But while Beckham's arrival did attract huge attention, persistent injury problems limited him to a handful of games where his influence was marginal, causing disappointment among fans and reduced media exposure.