Allen is Oakland's seventh coach since 2003. The Raiders have gone nine consecutive seasons without a winning record or a playoff berth, just missing out on the AFC West title on tiebreakers with an 8-8 record last season.
Allen, 39, will be the first new Raiders coach to come from the defensive side of the ball since late owner Al Davis hired linebackers coach John Madden in 1969.
In his first season as coordinator in Denver, Allen helped the Broncos improve from allowing an NFL-worst 29.4 points and 390.8 yards allowed per game to ranking 20th in yards (357.8) and 24th in points (24.4) this season on the way to an AFC West title.
Copyright 2012 by The Associated Press