Despite winning the Champions League, Chelsea finished 25 points behind champions Manchester City and the new boss has made domestic improvement a priority for next season
The Italian has signed a two-year contract thought to be worth around £3 million per year, but with a "break clause" that could be exercised after 12 months.
Di Matteo won the Champions League for the first time in the club’s history while interim first team coach, but with Chelsea only managing sixth in the Premier League, an improvement must be made domestically.
Speaking to The Guardian, the 42-year-old said: "We certainly want to do better in the league.
"Last season was a difficult one and we want to bridge that gap between us and the two Manchester teams and, obviously, continue to do well in the cup competitions.
"I had a wonderful break with my family, it was very enjoyable, but now the work starts. I have to start planning for pre-season."
Chelsea also lifted the FA Cup under Di Matteo, but the final league placing was the worst since Roman Abramovich bought the club and saw the Blues 25 points off title winners Manchester City.
While Chelsea have splashed out on £32m Lille starlet Eden Hazard and also acquired Marko Marin for £7m from Werder Bremen, Di Matteo has had to cope with the loss of several stalwarts, most notably Didier Drogba.
"We've lost a few players who are out of contract and we've already signed a couple of players, so there will be a slight change, but there won't be a complete overhaul of the squad," Di Matteo explained.
"We will try to make the right signings for the functionality of the squad."