The much-travelled Paraschos, who took the club into Europe for the first time during his previous spell at the helm from 2002-2007, has signed a short-term agreement until the end of the season but with the option to extend it into next term.
"I return to a very familiar and intimate setting and I am glad to be working again at a club where I have enjoyed a lot of special moments," Paraschos told reporters after holding his first training session.
"I will give my very best in trying to help the team recover from its recent slump as it is true that the club has not played as well as people have come to expect of late. I know the club and players well I believe that we can make the playoffs and put in a good performance."
Former Levadiakos boss Paraschos replaces Nikos Anastasopoulos, who departed on Sunday following a poor run of results which left them fourth with only a four-point cushion in a playoff spot and two league games remaining.