Tedesco oversaw a draw and three defeats in his four Serie A matches as Bologna boss, with his side scoring two goals in those games. The German-Italian manager was appointed in June following spells at Fenerbahce and the Belgium national team.
The club said in a statement that a contract with Palladino had been agreed until June 2029. Palladino began his coaching career at Monza, impressing in a two-year stint before moving to Fiorentina in 2024.
Palladino spent most of last season at Atalanta after taking over in November. He left in June after seven months in charge, with the side from Bergamo finishing in seventh place, three points ahead of Bologna in eighth.
Tedesco is the second managerial sacking in Serie A this season already, with Fiorentina having relieved Fabio Grosso of his duties on the 6th of September, bringing back Paolo Vanoli to steady the ship in Florence.
Bologna are currently 16th in the Serie A standings. They take on Torino at home on Saturday.