The ex-Town chief has been out of work since last October, when he was sacked by Championship side Ipswich.
Hurst is joined at Glanford Park by his No.2 from both Shrewsbury and Ipswich, Chris Doig.
The pair enjoyed roaring success at Montgomery Waters Meadow. They led Town away from League One relegation to the play-off final and Checkatrade Trophy final, which both ended in defeat.
The Lincolnshire outfit is closer to Hurst's home and the former boss and his assistant have been keen to get back in the game.
Scunthorpe were relegated from League One on the final day of last season.