Jolley replaces Russell Slade, who was sacked by the Mariners following their 3-0 defeat at Crawley last month.
That loss extended Town’s winless run to 12 matches and ended Slade’s second spell in charge of the club.
Jolley – who has coached at Burnley, Nottingham Forest and Crystal Palace – joins with the Mariners six points above the Sky Bet League Two relegation zone.
His last managerial role was at AFC Eskilstuna in Sweden and is set to take charge of his first Grimsby game on Saturday at Carlisle.
In a message to Mariners supporters on his official Twitter account, Jolley dared the fans to dream big.
He said: ‘It will be my privilege to serve you. I will do everything in my power to play my part in creating a football club we can all be proud of.
‘In my experience – anything is possible – if we dream big, work hard and work together. If we are as one, we will be stronger.’
England manager Gareth Southgate has claimed that the country needs to boot racism out of its own football before criticising World Cup hosts Russia.
Newcastle have been linked with a shock move for former Sunderland goalkeeper Simon Mignolet during the summer.