His contract takes the team through the World Cup qualifiers until October next year.
The 41-year-old takes over from Giresse, who quit in May in the wake of military coup in the West African country.
Mali have had to play their first home qualifying match for the 2014 World Cup at a neutral venue at FFA's insistence.
Giresse had led Mali to a surprise third place at the African Nations Cup finals at the start of the year.
Carteron's first match will be a 2013 Nations Cup qualifier against Botswana in September. The World Cup qualifiers in Africa resume next March.
Carteron was at the helm of Dijon when they were promoted to Ligue 1 but left the club in April after a single season in the French top flight.
He has also coached Cannes and as a player turned out for Sunderland, Stade Rennes, Olympique Lyon and St Etienne.
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