The 40-year-old joined after leading South Shields to second in the National League North last season; however, they missed out on promotion in the play-off final to Kidderminster Harriers in May.
That was South Shields’ highest finish in their history, despite missing out on National League football next term.
Watson said the football he wants his Rochdale side to play “may be a different way from what a lot of League Two clubs do”.
He continued: “I’m not saying there’s a right or wrong way; it’s just going to look slightly different to what a lot of League Two clubs do.
“We’re going to be really proud of that, we’re going to love the style and the philosophy a lot.
“We’re all going to buy into it, and we’re looking forward to really attacking the league, and we’re really excited by the games that we have coming up.”