The 52-year-old former Liverpool manager will take charge of the team until the end of the season, with former Barcelona coach Pep Guardiola, who is currently on a sabbatical, the favourite to get the role full time next summer.
Italian Di Matteo, who only took over in March, was cast aside despite winning the Champions League and FA Cup titles in May and being given a two-year contract as a reward.
"The owner and the Board believe that in Benitez we have a manager with significant experience at the highest level of football, who can come in and immediately help deliver our objectives," Chelsea said in a statement.
Benitez spent six years as Liverpool manager, winning the Champions League in 2005 and taking them to the final of the competition two years later.//DPA