Dickey replaces Tom Penders, who resigned less than two weeks ago after leading the Cougars to their first NCAA tournament berth since 1992.
Dickey led the Red Raiders to unprecedented success in his tenure there, from 1991 to 2001. The pinnacle came in 1996, when they went 30-2 and reached the NCAA round of 16.
But an NCAA investigation soon followed and the team struggled in the wake of scholarship losses.
He was fired after four straight losing seasons and was soon replaced by Bob Knight.
Dickey was an assistant at Oklahoma State from 2002 to 2008 and has been out of coaching the past two seasons.