Kewell, who starred for Leeds and Liverpool in the Premier League as a player, takes over at Boundary Park after spells in charge of Crawley and Notts County in League Two.
The 41-year-old replaced Dino Maamria, who was sacked on Friday after finishing 19th in the curtailed 2019/20 season due to the coronavirus pandemic.
Kewell follows in the footsteps of another former Premier League star, Paul Scholes, who lasted just 31 days as Oldham boss last year.
"I'm excited about the project and, don't get me wrong, it's going to take time," Kewell told the Oldham club website.
"Because the one thing I think this club does need is stability and if we can get that, then we can start to grow things.
"We've got to get back to the basics and we're having a 'clean slate' here now and I think the fans, myself, the owner, everybody wants to start seeing this club progress because we all believe that's there's a big potential."