Watson succeeded Davis Love III as the American captain for the next edition of the biennial golf match between the U.S. and Europe.
A winner of eight majors, including five British Opens, the 63-year-old Watson joined a select group to captain the U.S. team more than once.
He led the U.S. to victory in 1993, the last time the Americans won the Ryder Cup away from home.
The PGA of America, which made Thursday's announcement on a breakfast television show, had said they wanted to try something different after losing seven of the last nine Ryder Cups, including this year's in Chicago.
(Reporting by Julian Linden, editing by Ed Osmond)