Pioli, 51, was dismissed three games before the end of the Serie A season, in which Inter finished seventh and missed out on European football.
Fiorentina is the Italian's 12th different club as a boss having started his coaching career in 2003.
"It's always been my wish to coach here," said Pioli.
Former defender Pioli played 156 times for Fiorentina between 1989 and 1995.
"Only Fiorentina could have made me coach in Italy at this moment, otherwise I would have gone abroad," he added.
Pioli has also been boss at Italian clubs Salernitana, Modena, Parma, Grosseto, Piacenza, Sassuolo, Chievo, Palermo and Bologna.
Former Lazio boss Stefano Pioli has been appointed Fiorentina's head coach - one month after being sacked by Inter Milan.