The 54-year-old left Carlisle United last week and replaces Martin Allen, who left the Proact over Christmas.
Sheridan is back for a second spell at the helm having managed the Spireites from 2009 to 2012.
During his time in charge, the club won League Two and the Football League Trophy, beating Swindon Town 2-0 at Wembley.
Chesterfield have won just one National League game since the second weekend of August and find themselves in the bottom four.
He says he is well aware of the job facing him over the next four months.
“It’s a tough time and it’s about winning games as quickly as we can," he said. "I’m under no illusions.
“I’ve identified areas of the team we need to strengthen. Adding a couple of players will give us a bit of a lift.
"I'm delighted to be back at the club and I'm looking forward to getting down to work."
Academy manager John Pemberton has been in charge since Allen’s exit but has been able to prevent the team slipping into the relegation places.