Sir Clive Woodward's decision to name Dallaglio as captain for the tournament opener against Italy on February 15 completes a long road back for the one-time skipper.
"I am very pleased to accept this responsibility," said Dallaglio, who replaces Martin Johnson.
"It is a huge honour and privilege, and Martin has certainly set a high standard. He is a world-class player and is a great loss to England, but I respect his decision to retire.
"All teams move on and evolve, and England are no exception. The priority is to get selected on form, that's paramount. I see playing well as the key to success, and captaining your country is very special indeed.
"I want to continue to work closely with Clive and the coaches, and take England to the next level, but we are under no illusions.
"As world champions, it will be a huge challenge to achieve that goal, but it's one I know we all share."
Woodward found himself in the fortunate position of having several players capable of succeeding Johnson.
"Martin was always going to be such a hard act for any player to follow, both on the pitch and in his leadership qualities," said Woodward.
"Many players have proven to me they could do the job, but in my opinion, Lawrence is the stand-out choice for Italy. I am really pleased for him, and I am confident he will be excellent in the role."