Sheridan, who rejoins the club after a seven year absence, has since managed Chesterfield, Plymouth Argyle and Newport County.
The 51-year-old is no stranger to SportsDirect.com Park, serving both as a player and manager and Chairman Simon Corney spoke of his happiness at securing John’s services.
He said: “John has always been high up on my list whenever we have appointed managers. If you look at his record, he got us into the play offs when he was here and he has won the Johnstone’s Paint Trophy and promotion with Chesterfield, plus he took Plymouth into the play offs last season.
“Wherever he has been he has done really well. It was time to make a change and we feel we’ve got the right man here to make a difference, get the crowd going, get the players going and keep us in League One.
“I would also like to take this opportunity to add my thanks to Newport County who have dealt with this situation in a professional manner.”
John echoed the Chairman’s thoughts, adding: "Everyone knows how much I love this club. I was here for a long time as both a player and a manager so I’m really chuffed and excited to be back. I feel like I’ve got unfinished business from last time and I’m looking forward to the challenge. It’s a big one, but I’m really excited about it.
"As soon as the opportunity came, I wanted to get back involved and manage Oldham. I feel one of my strengths is getting teams who are struggling out of the positions they are in.
"We have some good players here, but we just need to win games, and that’s what it’s all about. I’m expecting us to get the results we are after and to climb the table.”
John will meet with the players tomorrow morning before taking his first training session soon after ahead of his first game back in charge against Bradford City on Saturday.