Los Che sacked Gennaro Gattuso in January before appointing staff member Voro for the eighth time as an interim coach.
Although Voro confirmed the plan was for him to stay in place until the end of the season, three consecutive defeats led Valencia to make a change.
The east coast club are 18th, a point from safety, having suffered 11 defeats in 21 league games.
“One of the most successful and illustrious players in the history of Valencia, (Baraja) knows the idiosyncrasies of the club and returns home as a coach to contribute his professionalism and commitment,” said Valencia in a statement.
“(He) forged his legend in the 2000s, contributing to win two La Liga titles, a UEFA Cup, a European Super Cup and a Copa del Rey.”
Thousands of supporters protested against businessman Peter Lim’s ownership of the club on Saturday, not entering Mestalla until the 19th minute of their 2-1 defeat by Athletic Bilbao.
Baraja, 47, played for Valencia 364 times between 2000 and 2010, as well as winning 43 caps for Spain.
His coaching career has been more ordinary, with short spells at Elche, Rayo Vallecano, Sporting Gijon, Tenerife and most recently Zaragoza in 2020, lasting under three months.
Valencia last won La Liga in 2004, a decade before Lim took over the club.
Since the Singapore property tycoon arrived the club have appointed 16 managers, including Voro six times.
