Richard O'Kelly returns to his former club to take up his first position as manager with 12 games remaining in the relegation scrap at the foot of League Two.
"This is a very special football club. I'm excited to be given this chance and it's great to be back," said O'Kelly.
Hereford are three places and three points above the Cobblers and just ahead of Dagenham & Redbridge in the table. The Daggers have strengthened their squad with the signing of ex-West Ham midfielder Ahmed Abdulla after his release from Upton Park.
"Ahmed has shown he is an accomplished player and has impressed everyone with his passing and commitment," said boss John Still.