Watford, who sit 10th in England’s top flight, announced that the 47-year-old Spaniard had signed an 18-month contract, becoming the club’s 10th manager since 2012.
“It’s a special atmosphere and I’m very happy to feel this experience and to say thanks to them because I know they (Watford fans) are the number one,” Gracia said in a video posted by Watford on Twitter.
“After the supporters will come the rest of the players, but they (the fans) are the number one.”
Gracia’s first match in charge will be the FA Cup fourth-round tie at Southampton next Saturday.
Earlier on Sunday, the Hornets had dismissed Silva, saying that an “unwarranted approach” for the former Olympiakos boss from Everton earlier this season was “the catalyst” for the decision.
Silva had only joined from Hull City in the close season, but after a strong start at Vicarage Road, a run of only one win in 11 Premier League games culminated in his demise.
“The club is convinced the appointment of Silva was the right one and had it not been for the unwarranted approach by a Premier League rival for his services, we would have continued to prosper under his leadership,” Watford said in a statement.
Ex-Villarreal midfielder Gracia impressed as a coach when leading Almeria to promotion to Spain’s La Liga in 2013, before taking over at Malaga after a short stint with Osasuna.
He helped Malaga to consecutive top-10 finishes, featuring a famous win over Barcelona at the Camp Nou in his first season, but left in 2016 for an ill-fated spell at Russian club Rubin Kazan.
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