Ghotbi, who attended UCLA and was credited for discovering John O'Brien while working as a youth coach in Southern California, replaced Mohammad Mayely-Kohan, who resigned after only two weeks on the job.
Mayely-Kohan had replaced former Iran star Ali Daei after the team's 2-1 loss to Saudi Arabia in Tehran jeopardized its chances of qualifying for the 2010 World Cup.
Ghotbi, 45, had briefly been an assistant coach with MLS's Los Angeles Galaxy and spent eight years in South Korea working with the national team program and Samsung Bluewings.
Ghotbi told the New York Times he was the choice for the job of 85 percent of Iranians.
"I've worked with some of the best coaches in the world, in the World Cup," he told the Times from Dubai, where he had recently been living. "I've had success with Persepolis. I know the players. I think I'm the best candidate. That I'm an Iranian-American, maybe at times that is not very interesting."
(Click here for a BBC video on Ghotbi.)