The 46-year-old finished his playing career at New Douglas Park after spells with St Mirren, Airdrie, Drogheda United, Falkirk, Partick, St Johnstone, and Ross County before joining the Hamilton coaching staff as Billy Reid’s assistant as the side won promotion to the top flight in 2008.
Taylor will work with the existing first-team coaching staff off Guillaume Beuzelin, George Cairns, and Brian Potter.
Beuzelin and Cairns will take charge of the team for Saturday’s home game against Kilmarnock, with the new head coach watching from the stands.
Speaking to the Accies’ website Taylor said: “I am delighted to be back at this great club, I have had many fantastic memories during my first time here and to now have the privilege to sit here as the club’s new Head Coach is a real honour for me.
“I am a coach who loves working with players and improving them. This club is well known throughout Britain for doing that and I feel coming here as a coach is a good fit.
“I have had some great conversations with Allan and the rest of the board. I would like to thank them for showing faith in me for this position and I look forward to working with them.”
Chairman Allan Maitland added: “We are delighted to have a coach of Stuart’s quality as our Head Coach. He knows the club well and understands what our club is all about.
"As a coach, he comes here with a great amount of experience and we look forward to working with him.”
Taylor left his coaching role at Hamilton in 2011 and had coaching stints at Al-Khor Sports Club in Qatar before an 18-month spell as manager of Limerick.
He was named head coach of Aston Villa’s Under-23s in July 2014 before striking up a partnership with Paul Lambert in November 2016 at Wolves. Taylor later followed the former Celtic captain to Stoke City and Ipswich Town.
Rice announced his shock departure from Accies just two games into the 2021/22 Scottish Championship campaign following a 1-0 defeat by Morton.