Hoffenheim are 17th in the 18-team German top flight, four points behind Augsburg in the relegation playoff spot, with seven games left in the season.
Gisdol most recently worked as assistant coach at Schalke 04 until December and had also been in charge of the Hoffenheim reserves until 2011.
"The 43-year-old football coach takes over the team with immediate effect and has been entrusted by the club leadership with the rebuilding of the team past the current season," the club said in a statement on Tuesday.
Hoffenheim lost 3-0 at Schalke on Saturday.
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