The former Liverpool, Aston Villa and Derby striker, who won 75 caps for his country, replaces Salvador Iriarte, who has taken over as Real Sociedad´s new technical director in the wake of their relegation from La Liga.
Swansea-born Saunders, 43 last week, was one of the unsuccessful candidates for the Wales job when Toshack was appointed in November 2004.
© Copyright PA Sport Ltd 2007, All Rights Reserved.
Do YOU want to write for GiveMeSport? Get started today by signing-up and submitting an article HERE: http://gms.to/writeforgms