Hughes, who was sacked by Stoke six days into the New Year, made 52 Premier League appearances for Southampton between 1998 and 2000 under Dave Jones then Glenn Hoddle, scoring just two goals before moving on to Everton.
The Saints hierarchy pulled the trigger with eight games remaining as they attempt to cling on to their Premier League status.
The 46-year-old Pellegrino joined on a three-year deal in June last year, weeks after leaving Spanish team Alaves.
"Unfortunately in the last couple of seasons, that hasn't been the case".
The team, who are now one point outside the relegation zone, have taken on the form of their coach in recent months in that they've become nearly entirely anonymous, with no recognisable approach or identity to speak of.
Hughes played more than 50 times for Southampton in the late 1990s and his appointment would end a run of four non-British managers after Mauricio Pochettino, Ronald Koeman, Puel and Pellegrino. And to think, they sacked Claude Puel for finishing 8th.
If Southampton are prepared to wait until the summer in their search for a new long-term manager they would no doubt boost their chances of luring over a boss who is now in employment.
Saints will be hoping to appoint Pellegrino's successor quickly, with an FA Cup quarter-final at Wigan looming on Sunday.
Southampton have begun the search for a manager to save them from relegation after sacking Mauricio Pellegrino on Monday night.
They have won just five league games this season and their 3-2 victory at West Bromwich Albion, who are bottom of the table, in February is their only league win since November.