The 49-year-old Paraguayan will take charge of the Madrid-based team until the end of the season, with the brief of saving 18th-placed Rayo from relegation from the Primera División.
Benítez replaces Fernando Vázquez, who was sacked on Monday following Rayo's third straight home defeat, and beat off competition from former Argentinian international Óscar Ruggeri to land the job. Ruggeri had been favourite to take over at the Teresa Rivero stadium, but it is thought his demands for a contract until the end of June 2004 were a stumbling block.
This will be Benítez's third managerial spell in Spain. He was in charge at Real Racing Club Santander between January 1999 and June 2000 before returning to El Sardinero towards the end of the club's relegation season, 2000/01. Benítez has also coached Paraguayan side Club Cerro Cora and Chile's CSD Colo Colo.
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