Mr. Pepper, 67, will take over as nonexecutive chairman from former Sen. George Mitchell at the beginning of 2007.
Mr. Pepper was chairman-CEO of P&G from 1995-1999, then returned as chairman in 2000 after his successor, Durk Jager, resigned following two quarterly earnings disappointments. Mr. Pepper retired from his second tour as P&G chairman in 2002.
He later served as VP-finance and administration for his alma mater, Yale University, from 2004-2006 and currently is CEO of the National Underground Railroad Freedom Center in Cincinnati, a project he spearheaded but that recently sought financial help from the city after it didn't meet revenue projections.
As P&G CEO, Mr. Pepper helped lead P&G establish business in emerging markets such as China and Eastern Europe, both of which have been major growth engines for the company in recent years.
Since joining Disney's board in March 2004, "John has quickly immersed himself in our business and shared his broad and deep expertise in corporate management, global brand building and leadership development," Robert A. Iger, president-CEO of Disney, said in a statement.
Disney had previously asked Mr. Mitchell, 72, to delay his retirement, though he already had reached the board's mandatory retirement age. Mr. Mitchell became chairman in 2004 after a shareholder revolt led by Roy Disney and former director Stanley Gold resulted in a 45% "no confidence" vote against former Chairman-CEO Michael Eisner.