The former Wallabies have coached in the US and Japan respectively and will act as assistants under the returning Cheika next Super Rugby Pacific season.
Cheika agreed to return on a two-year deal at the club he led to a title in 2014 and will start in November once his duties with the Roosters in the NRL and Lebanon in the Rugby League World Cup are complete.
Senior assistant Hoiles, who in 2023 coached Randwick to their first Sydney club title in 20 years, could take the helm as early as 2028 if former Wallabies and Argentina coach Cheika picks up another Test gig after next year's World Cup.
Palu played in three World Cups and, like Hoiles, won a Super title under Cheika before leaving for Japan.
"I've grown up playing all my junior rugby in NSW," Hoiles said.
"The Waratahs have always been the team you aspire to play for and it's the same as a coach.
"It's a nice moment, and it's a bit of a full circle moment to come back and get this opportunity. It's a really important part of Australian Rugby's ecosystem, making sure the Waratahs are performing on and off the field.
"It feels good to be back."
It comes as the club, cash-strapped when taken over by Rugby Australia (RA) in 2024, attracted the interest of a private ownership consortium keen to purchase the licence.
It's understood RA are interested, but not desperate to sell the licence and require more information regarding high performance plans before considering any offer.
A consortium led by former Wallabies coach Bob Dwyer was among several interested parties that were knocked back in 2014.
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