Appleton moved to Bloomfield Road as successor to Ian Holloway, who ended a highly-successful three-and-a-half year stint with the Seasiders to join Championship counterparts Crystal Palace at the weekend.
He told Sky Sports News: "I'm absolutely delighted. It's an opportunity that I didn't see coming but one that I'll hopefully take with both hands."
The 36-year-old former Manchester United youngster had his playing career cut short by a serious knee injury but has impressed in his first managerial role, earning plaudits in difficult circumstances at Portsmouth.
Appleton, who has signed a one-year rolling contract, left Portsmouth after an eventful year at Fratton Park which saw the club placed in administration and relegated to League One.
He said: "It was a situation where there was a lot of speculation regarding myself and other jobs not too far away from here over recent weeks, but I think an opportunity to get back into the Championship at a club who have been very competitive over recent seasons was one that I didn't feel I could turn down."
Blackpool, who led the table in the opening weeks of the season, lie 12th in the Championship after earning a first win in six outings at Sheffield Wednesday on Tuesday.
Appleton previously worked at West Brom as assistant under Chelsea boss Roberto Di Matteo and England manager Roy Hodgson.
Chairman Karl Oyston said: "Everywhere Michael's been people speak very highly of him - of his work ethic and coaching talent.
"He's very motivated and certainly what he's been through over the past 12 months at Portsmouth, I think he's done very well and coped with probably the most difficult circumstances in football and come out with very extreme dignity."
Source: PA
Source: PA