Waratahs coach Michael Foley is ecstatic to have Elsom back at the club and said the 28-year-old was the obvious choice to take over from previous skipper Phil Waugh.
"We have spent the past months in discussions with senior players in an effort to determine the best man for the job," Foley said.
"There will never be a perfect replacement for retired skipper Phil Waugh. However, after defining the role and what it was the players expected and wanted from a captain, Rocky was the stand-out candidate."
Elsom, who has 75 caps for his country, is currently recovering from a hamstring injury and is expected to be available for the Waratahs within the first month of the new season.
The Waratahs start their 2012 campaign with a home game against the Reds on February 25.