The former Almeria coach replaces Jose Luis Mendilibar, who was sacked earlier this week following the team's poor start to the season.
"I have found a dressing-room that is determined to do things well, with the values of honesty and identity above all else," Gracia told reporters.
"We need the players to recover physically and also give them a psychological lift," he added.
"We have to get the most out of them to create a more competitive team and we also have to look at why they have not scored goals and why they have let in so many."
Osasuna are currently bottom of the La Liga table with three defeats in their first three games.