The hugely successful 59-year-old, who had been linked to the England manager's position, which becomes vacant after this year's World Cup, said he was more interested in coaching Russia's team.
"I am very proud that I can give my contribution to develop Russian football and make Russia a great football country again because the potential is enormous," Hiddink told reporters.
"If I didn't believe in success, I shouldn't have come here. I am very ambitious to be successful with all the people here in Russia. They are on the edge of a new period." Hiddink will get 2 million euros ($2.42 million) per year as coach plus a bonus linked to results.
"There is a lot of technical potential in the national team and if players are aware of their potential then they can increase their level," Hiddink said.
"From what I can see and smell from the DVDs, there are some players who have indeed the potential to be leaders." Russian Football Union head Vitaly Mutko said he had high expectations for Hiddink, who will be in charge of Australia in this year's event in Germany. "We want to return our team to the glory days of the Soviet Union," he said.
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