Barlow took charge of training at the club for the first time today, after being given the good news on his 58th birthday last week.
He replaces Iffy Onuria, who was sacked just a few months into the job.
Barlow was in charge at the Old Showground from 1983 until March 1987.
His spell in North Lincolnshire saw little memorable action in the Fourth Division, but saw memorable cup clashes with Aston Villa and Tottenham Hotspur.
As well as managing Scunthorpe, Barlow was in charge of Chesterfield and has held coaching positions at Barnsley, Sheffield Wednesday and Bristol City.