The 27-year-old Best, who was yesterday named in the Ireland squad for next month's two-Test trip to Japan, made his Ulster debut against Connacht in 1999 and has accumulated 85 provincial caps.
Capped previously at Ireland Schools, Under-19, Under-21, Under-25 and 'A' level, the Craigavon-born forward made his Ireland debut against Tonga in the summer of 2003.
Best, whose younger brother Rory hooks for Ulster, earned the last of his six Test caps as a second half replacement against the US Eagles last November.
Ulster Chief Executive Michael Reid said: "Simon is respected by the management and his team-mates and should bring a fresh outlook to the captaincy.
"With the new breed of players coming through the ranks, the appointment of a younger captain who, as well as having vast experience in Celtic, European and Interprovincial competitions with Ulster, has solid experience of the international scene, should provide a good conduit between the younger and the more experienced players within the squad, as well as with management."
Ulster finished the 2004/05 season in disappointing fashion, losing out in the Celtic Cup quarter-finals to the Ospreys after placing eighth in the League. Mark McCall's side also failed to make the Heineken Cup's knock-out stages for the sixth time since 1999.