The 41-year-old moves across Lancashire from North End, where he was working as head of youth development having called time on a professional career spanning over 1,000 games at the end of last season.
Alexander replaces Micky Mellon in the Highbury Stadium hotseat and is taking on a first senior management role with the npower League Two club.
His first game at the helm comes on Saturday at home to fellow promotion-chasers Southend.
Chris Lucketti has also left his coaching role at Deepdale to be part of Alexander's backroom staff.
A Preston statement read: "We would not want to stand in the way of two players who have given fantastic service to Preston North End, both as players and now as coaches.
"We were approached by the Fleetwood chairman to ask permission to speak to Graham and we of course gave him the courtesy of informing him of this. Graham said he would like the opportunity to talk to them and has agreed to join as manager.
"He asked for permission to take Chris with him, as his number two, and again we were happy to see two great servants of the club get this chance at first-team level."