He also had a spell as player-manager for three seasons from 1982 when Leeds were in the old Division Two.
He is set to bring harmony back to the club by offering an olive branch to outcasts Mark Viduka and Danny Mills.
"I think we are going to be okay with Mark," said Gray.
"I have no problems handling Mark. He is definitely an important member of the first-team squad.
"I don't know how long the loan is with Danny, I will look at it."
He returned to Leeds' Thorp Arch training ground today less than eight months after being told he had no future at the club and given a year's notice.
"I'll do my best to try and pick points up, but it's up to the people at the top who they choose to be the next manager," added Gray."I don't think it is a lost cause, but it is a difficult task.
"People only have to look at the league table and the finances of the club to realise that, it was not an easy job for Peter Reid.
"But it is a big club with a big fan base and there is potential, especially with the crowds the club can attract.
"I will try to instil a lot of confidence in the players and I hope they will respond to that.
"If you start to win a few games it begins to pick people up.
"If you are in there fighting you always have a chance, and we will look to move up the league."
The 55-year-old has had jobs as reserve coach at Middlesbrough and manager's jobs at Rotherham and Hull before returning to Elland Road in 1995 to work with the youth teams alongside current Nottingham Forest manager Paul Hart.