The Colts introduced Dungy at a news conference Wednesday, his first appearance since being hired to replace Jim Mora. Terms of Dungy's contract were not disclosed, but the Indianapolis Star reported he received a five-year deal worth $13 million.
"I really felt wanted by the Colts," said Dungy, who was dismissed earlier this month by the Tampa Bay Buccaneers. "After I got off the phone with Jim (Irsay), there was no doubt they wanted me. It was really the right fit."
Dungy's contract terms would be about half of what Steve Spurrier received over five years to be coach of the Washington Redskins.
"I just wanted him to know from the start that there was no other coach on the planet I wanted to coach my football team," Irsay said. "Not Spurrier. Not (Bill) Parcells."
Dungy's biggest problem in Indianapolis is a defense that yielded an NFL-high 486 points this season and cost Mora his job. Dungy said he wants to develop a defensive unit with an emphasis on speed.
"I would like to see us become a very fast team, a very aggressive team that forces a lot of turnovers," he said. "In most places I've been, we've been able to do that."
While Mora was fired after a disappointing season, Dungy pointed out that the Colts won 29 games the last three years -- just one fewer than the Buccaneers during the same span.
"This is not like going to Tampa," he said. "This is a program where there is a quality nucleus that knows how to win, so I think it's just a question of fine-tuning things in the right direction."
Dungy, 46, was also a candidate for the Carolina Panthers' coaching position. But he admitted early this week that he was "very interested" in the Colts' job. That was understandable with quarterback Peyton Manning, two-time rushing champion Edgerrin James and receiver Marvin Harrison forming the base of the Colts' offense.
But the defensive problems prompted Colts president Bill Polian to urge Mora to fire defensive coordinator Vic Fangio. When the coach refused, he was dismissed on Jan. 8.
Polian has sacrificed defense in fitting huge contracts for Manning, James, Harrison and tight ends Marcus Pollard and Ken Dilger under the salary cap.
Dungy turned the Buccaneers into one of the league's premier defensive teams in six years as their coach and compiled a 54-42 record. But he had little luck with choosing offensive coordinators and was fired after Tampa Bay lost to the Philadelphia Eagles in the NFC wild card round for the second straight season.
"I think I'm definitely a much better coach than I was six years ago coming in," Dungy said. "I know a lot more what to expect. I just feel better about my ability to get the most out of the players and I think that is what being a coach is all about."
In Indianapolis, Tom Moore will remain as the offensive coordinator.
Before Dungy arrived in Tampa Bay, the Bucs had endured 13 straight losing seasons and he is the only winning coach that franchise's history. But after the Bucs reached the NFC championship game two years ago, they fell short of expectations with back-to-back playoff losses to the Eagles.
Tampa Bay went 2-4 in playoff games under Dungy and failed to score a touchdown in its last three postseason contests.
Believing they could lure two-time Super Bowl-winning coach Parcells out of retirement, the Bucs fired Dungy on Jan. 14, two days after a 31-9 loss to the Eagles. But Parcells turned down the job.
The Colts made playoff appearances in 1999 and 2000 under Mora, but slipped this season. Indianapolis lost seven of its last nine games and allowed 27 or more points in eight straight before a season-ending win over Denver.
The Colts also lost James to a torn ACL after an Oct. 25 win at Kansas City, but rookie free agent Dominic Rhodes stepped in and rushed for 1,104 yards and nine touchdowns.
"Jim Mora did a great job building a solid foundation for this team and Tony Dungy is the right man at the right time with the right approach to take us the rest of the way," Polian said.