The former England coach has replaced the sacked Nigel Clough on a two-and-a-half year contract to take up a third spell with the Rams.
McClaren played for Derby in the 1980s and had a stint as Jim Smith's assistant in the 1990s before he left for a similar role under Sir Alex Ferguson at Manchester United.
He is looking forward to being back at the club and told the FL72 Review show: "I've got a great history with this club as a player in the 80s and as assistant to Jim Smith in the 90s.
"It was a very successful period. I know the town very well, my family has been brought up there and there was no hesitation.
"I know what this club is all about. I know its fans, I know the fanbase, I know what they want and I know how great this club can be if it's successful."
McClaren takes charge with Derby 14th in the Championship table and he is aiming to build on the foundations laid down by his predecessor Clough.
He added: "We want to build initially on the good work that has gone already. You've seen all the young players that have gone through and that's got to be a credit to Nigel Clough and the staff and the academy.
"They have been bringing young talent through over the last three or four years. The club has stabilised itself after being in the Premier League and coming out, and they've been getting the finances in order.
"What we want to do now is build and develop from that. I'm here for two-and-a-half years initially and we want to assess the situation.
"We want to keep the homegrown players coming through, build on the academy, and build an environment and culture for the players to challenge for a play-off spot, then eventually get in the play-offs and eventually then to be one of the contenders to go up into the Premier League.
"We've got two years to do that. It's a building process and not something that's going to happen overnight."
When asked if there is money to spend to improve the squad, McClaren said: "The conversation I've had is there's money available, but how much I don't exactly know.
"We've come in and we know the ambitions of the owners and the club. We have to assess the situation and that's what we'll be doing in the next month, six weeks.
"We don't want to be doing things too quickly, we want to build and build and build this squad up. We will use the young players, bring in experienced players and make sure we challenge for the Premier League spot."