Pennock, 46, was placed in charge until the end of 2016-17 following Justin Edinburgh's departure on 3 January.
The ex-Forest Green manager guided the Gills to 20th in League One, one place and one point above the drop zone.
Taylor, 64, returns to "oversee recruitment and all footballing policy" after two spells managing the club.
During his first stint in charge, Taylor led Gillingham to promotion to the second tier via the old Division Two play-offs.
He was reappointed as boss in November 2013, but was sacked after 14 months in charge.
Gillingham have confirmed Ady Pennock will stay on as head coach next season, with former boss Peter Taylor returning to the club as director of football.