Ranieri oversaw just two wins during his time as a manager, one of which was at home to Manchester United.
Ranieri was sacked after less than four months in charge.
Ranieri's departure was triggered by last Friday's home defeat to Norwich, which saw the Hornets drop into the bottom three.
A new appointment time was needed to give the club time to get out of trouble.
The board of the Hornets believes that Claudio is a man of great integrity and honour, who will always be respected here at Vicarage Road for his efforts in leading the team with dignity.
With nearly half of the season remaining, the board feels that a change in the head coach position now will give a new appointment enough time to work with a talented squad to achieve the immediate goal of retaining the status.
Since the Pozzo family took over, they have had 15 different managers.
The teams played as a team.
Ranieri was given a two-year contract after replacing Xisco Munoz.
He left with the club 19th in the table and two points from safety after just two wins.
They have lost seven of their previous eight games and will be looking to get their first win of the season when they travel to bottom of the table Burnley on February 5.
In 14 games under Ranieri, the Hornets have lost 11 of them, 10 of them in the league and one in the FA Cup.
There have been eight managerial changes in the league this season, including the departures of Xisco, Steve Bruce, Nuno Espirito Santo, Daniel Farke, Dean Smith and Ole Gunnar Solskjaer.
I'm not worried about the future.
Ranieri shocked English football by leadingLeicester to an unthinkable title triumph in 2016 but he was sacked by the Foxes the following season.
Before he was appointed as the boss of the Hornets, he had managed five other teams, including Sampdoria.
The club's owners have had 14 managerial changes in the last 10 years.
He told Radio 5 Live that he was not worried about the future.
I want to react and be calm. I want players who are passionate and who are willing to give their all for the people of Watford.
Ranieri said he was very confident in turning it around.
Watford are flailing without a long-term plan.
Chris Sutton said on The Monday Night Club that Ranieri's dismissal was no surprise and that the Pozzo family's expectations are too high.
"I thought they were always going to struggle," he said.
I think they made a mistake. At the start of the season, he was in charge of seven games.
Ranieri came in and won the league withLeicester, but his last few appointments were a disaster, he had three wins out of 17 at Fulham.
The Hornets have yet to keep a clean sheet in the league.
The former Manchester City defender argued that the Hornets lack an easily identifiable style of play.
"What are they trying to do?" asked Richards.
"You don't know what they're going to do, are they going to press, drop off, play through the lines or keep possession?"
You don't know which one of them will show up. Ranieri said he was going to try and make them difficult to beat.
If you only get seven points from 13 games, the writing was always going to be on the wall.
Mike Parkin said that his club are "flailing about" without a long-term plan.
He said that you have to look long term when running a football club.
There is a feeling among fans that we are wasting a golden ticket of a long-term legacy from the Pozzos.
The owners should be given credit because they are in the premier league.
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