Balakov, who played in the Bulgaria side that reached the semi-finals at the 1994 World Cup, said: "We will make every effort to qualify for Euro 2020. But we are not magicians.
Bulgaria are second in their Euro 2020 Group A after draws against Montenegro and Kosovo. They visit the Czech Republic on 7 June and host Kosovo on 10 June .
His contract will run from 1 June until the end of the 2022 World Cup qualification stages in November 2021.