The former Great Britain and Bradford Bulls supremo left Wigan Warriors at the end of the season after his contract was not renewed.
The 48-year-old succeeds John Dixon and will be reunited with his former Great Britain assistant Jon Sharp, who will be first-team coach while Iestyn Harris, who is also Wales coach, has also been appointed as an assistant.
"We are delighted that Brian has accepted the job of head coach at the Crusaders," said chairman Leighton Samuel.
"His track record in Super League is second to none and I'm sure that he will be a massive success here, the same as he has been at Bradford and Wigan."
Crusaders finished bottom of Super League last season but are hoping for a fresh start under a new management structure when they relocate from Bridgend to Newport for the start of next season.