Scott, who also had a spell in charge at Rotherham and last year rejoined Brentford as head of recruitment, will have a "primary focus on the UK and the club's Academy", Watford confirmed on Monday afternoon.
Watford chairman & chief executive Scott Duxbury said on the club's official website: "We have taken the opportunity to enhance our recruitment operation with the appointment of Andy.
"He will play a key role in further developing our UK infrastructure, helping the club to retain its edge and agility of action in an increasingly competitive environment."
Watford also confirmed Filippo Giraldi would continue as technical director with "an overarching responsibility for the club's entire recruitment strategy".
The Hornets have impressed this season under new boss Marco Silva, but lost their last three matches ahead of the international break to sit in ninth place.
Watford return to Premier League action against West Ham on Sunday, which will be the first match since the east London club appointed David Moyes as manager following the sacking of Slaven Bilic.