Merlo is Racing's third coach of the season, taking charge when they have two points from 10 games in the 'Inicial' championship, their worst start since the introduction of two 19-match tournaments per season in 1991.
"I'm very happy they called me (and) I hope not to disappoint anyone and that everything goes well," Merlo told ESPN's Sportscenter programme.
"Racing is like my second home and when there's a team you love that's in trouble you feel badly," the former River Plate midfielder said.
"We'll have to work on the (players') mental state," he added of a team who began the season with expectations of challenging for the title. "I see a good squad."
Luis Zubelda was sacked after the first five matches of the season and his successor, Carlos Ischia, lasted another five before resigning this week.
Racings on-field woes were exacerbated by a management crisis partially resolved when club president Gaston Cogorno and one of his vice-presidents Rodolfo Molina, who had fallen out, both resigned last week.
Merlo, who begins his third spell as Racing coach next week, was appointed by new president Victor Blanco until the end of the Inicial in December when his position will be reviewed.
He steered the club to their seventh league title in the professional era after a drought dating back to 1966.
"Racing gave me glory as a trainer, it's an honour they came looking for me (in their hour of need)," Merlo added.
The club's goalkeeping coach Nacho Gonzalez will be in charge as interim coach for Racing's match at Estudiantes in La Plata on Sunday.