The Toon legend, back at St James' Park 4,025 days after quitting as boss, was named as the shock replacement for Sam Allardyce.
Keegan, 56, watched from the directors' box as Newcastle beat Stoke 4-1 in their FA Cup third-round replay - to seal a fourth-round clash at Arsenal.
He said: "It's nice to be home. I'm delighted to be back."
And Toon chairman Chris Mort added: "I think we've got the right man in the end."
Keegan, out of the game since leaving Manchester City in 2005, has signed a three-and-a-half year deal worth a whopping £20million.