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He returned to Blackpool as manager on 6 July 2019, eleven years after initially departing the club for Leeds United.

On 6 July 2019, the day after Terry McPhillips announced his resignation, Grayson was appointed Blackpool manager on a two-year contract. He was sacked on 12 February 2020, seven months after his return.

On 11 February 2018, Grayson was announced as the manager of League One club Bradford City, following the dismissal of Stuart McCall. He left Bradford City in May 2018, at the end of his contract.

Grayson's son, Joe, made his competitive debut for Blackburn Rovers on 28 August 2018. In doing so the pair became the third father-son duo to play for the club. He is brother to former professional cricketer Paul Grayson.

On 29 June 2017, Grayson was named as the new manager of newly relegated Championship club Sunderland, replacing David Moyes, on a three-year contract. His first league game as manager came on 4 August 2017, where his side drew 1–1 at the Stadium of Light against Derby County. In his following fixture, his team defeated Norwich City at Carrow Road, with the final result 3–1, Sunderland went on to record another draw, before commencing a four-game losing streak, until drawing one again. After a 2–1 defeat to Cardiff City, Sunderland dropped into relegation zone. On 26 September 2017, his team suffered a 5–2 loss to Ipswich Town at Portman Road, with them moving down to twenty-third place in their division. Grayson's team then recorded three consecutive draws, however, they did not move from their league position. He was dismissed after a 3–3 home draw with Bolton Wanderers on 31 October.

In May 2014 Grayson guided Preston North End into the League One play off semi-final against Rotherham United. However, after drawing the first leg at Deepdale 1–1, North End lost the return leg 3–1 despite taking an early lead through Paul Gallagher.

In February 2013, Grayson became the new manager of Preston North End, taking over from Graham Westley who had been relieved of his duties the previous week. In 2017, Grayson had a brief unsuccessful spell managing Sunderland, before becoming the manager of Bradford City in February 2018. He left Bradford City in May 2018, at the end of his contract.

Grayson's first game in charge was at Elland Road on Boxing Day against one of his former clubs, Leicester City, who were top of the league. Leeds were sitting in 9th place, on the back of five straight defeats, but a late equaliser from Robert Snodgrass gave Grayson's new club a 1–1 draw. He recorded his first victory, a crucial 3–1 win away at Stockport County two days later. Leeds won their final eleven home games, matching a forty-year-old record from the Don Revie era. Leeds' away form did not match this, and Grayson guided the club into a fourth-place finish, earning them a two-legged play-off tie against fifth-place Millwall, which Leeds lost 2–1 on aggregate.

He was dismissed by Huddersfield on 24 January 2013, following a run of 12 consecutive matches without victory stretching back to 17 November 2012.

Simon Grayson was appointed manager of Preston North End on 18 February 2013 and went unbeaten in his first four games in charge. Grayson then went on to keep the club clear of relegation with four games to go. Safety was confirmed after a 2–0 home win against Oldham Athletic on 9 April 2013.

On 1 February 2012, Grayson was dismissed by Leeds United due to lack of results he was getting. A Club Statement said: "We have 18 games to go this season and are still within touching distance of the Play-Offs, but felt with the transfer window now closed we needed to make the change at this time in the belief that a new managerial team will be able to get more out of the existing squad of players and make the difference". His last result was a 4–1 defeat to Birmingham City on 31 January 2012.

On 20 February 2012, just five days after Lee Clark was dismissed as manager, Grayson became the new manager of League One club Huddersfield Town on a ​3  ⁄2 -year deal. His first game in charge of the Terriers was in their 2–0 home victory over Exeter City when both defender Jamie McCombe and leading striker Jordan Rhodes scoring he also introduced Icelandic midfielder Joey Guðjónsson to the squad for the first time all season. While remaining unbeaten, his next five games in charge proved to be mostly unspectacular, resulting in four draws against Stevenage, Bury, Rochdale and Colchester United also defeating Hartlepool United in a 1–0 home victory. The early pattern of these results remained similar to those of the previous manager, Lee Clark who managed a number of draws, which were held responsible for the Terrier's inability to cement a place in the automatic promotion spots. With 10 games remaining Town occupied 4th position in League One, contrary to the chairman Dean Hoyle's brief urging the club to reach one of the top two positions. On 26 May 2012, Grayson led Huddersfield to play-off victory over Sheffield United, gaining promotion to the Championship.

Grayson's first match in charge of Huddersfield in the Championship came on 17 August 2012, a 1–0 defeat away to Cardiff. His first Championship win as the club's manager was on 25 August 2012, a 2–0 home victory against Burnley. On 1 December 2012, Grayson managed Huddersfield against his former side Leeds for the first time, losing 4–2 at home.

Grayson's Leeds side was promoted on 8 May 2010 after beating Bristol Rovers 2–1. The win saw Leeds finish the season in second place, and earn automatic promotion to The Championship. Grayson reached his 100th game managing Leeds in the 2–1 win against Middlesbrough

Grayson was rewarded with his first Manager of the Month award while in charge at Leeds United for the month of December 2010. During that month he oversaw his Leeds team unbeaten in the league, winning three games and drawing two, including a 2–0 home win over league leaders QPR. After a dip in form Leeds dropped out of the playoffs and finished the season in 7th place.

Grayson and Leeds started the 2009–10 season with an unbeaten run in all competitions, which included seven victories and a draw in League One and saw the club progress to the third round of the League Cup, before losing 1–0 to Liverpool. In that season's FA Cup, Grayson led Leeds to a 1–0 victory away to Manchester United, their first win at Old Trafford since 1981. Grayson's side also earned Leeds a replay against Premiership opposition Tottenham Hotspur after a 2–2 draw at White Hart Lane.

In 2008, he was appointed manager of Leeds United, but despite leading them to promotion to the Championship he was dismissed in February 2012. He was soon back in management, taking over from Lee Clark at Huddersfield Town. He again gained promotion from League One via the play-offs, beating Sheffield United in the final. But after a run of twelve games without a win he was dismissed at the end of January 2013.

Grayson was heavily linked with the vacant managerial post at Leeds United, with whom he started his playing career, following the dismissal of Gary McAllister in December 2008, but Blackpool refused permission for Leeds to speak to Grayson. Despite this Grayson tendered his resignation, which the Blackpool board did not accept, and he was announced as Leeds United's new manager. The two clubs ultimately settled the dispute for an undisclosed fee.

On 6 January 2007, he guided Blackpool to the fourth round of the FA Cup for the first time in 17 years, after beating Aldershot Town 4–2 at Bloomfield Road. They were knocked out by Norwich City, who beat them 3–2 after extra time, in a replay at Carrow Road on 13 February, narrowly missing out on a trip to London to face Chelsea in the last sixteen.

Grayson received his second League One Manager of the Month award of the 2006–07 season in May 2007. Two days later, on 5 May 2007, Grayson guided Blackpool to a final placing of third, and thus a place in the play-offs. Blackpool beat Oldham Athletic 5–2 on aggregate over the two legs of the play-off semi-final. They met Yeovil Town in the final at the newly renovated Wembley Stadium on 27 May and won 2–0, securing promotion to the Championship. It was their tenth consecutive victory, a new club record. This was extended in Blackpool's first game in the Championship with a league win over Leicester City and a victory against Huddersfield Town in the League Cup.

In October 2007, Grayson guided Blackpool to the fourth round of the League Cup for the club's first time in 35 years. They were drawn against Tottenham Hotspur at White Hart Lane, where Spurs won 2–0. In December 2007 Grayson signed a two-and-a-half-year contract, following two years working without a formal contract. In May 2008, Blackpool finished nineteenth in the Championship.

In late 2006, he led Blackpool to only one defeat in fourteen league games, a sequence that included five wins out of six, resulting in their appearance in the four play-off positions. The run also brought attendances of more than 7,000 to Bloomfield Road. This led to Grayson being awarded the Manager of the Month award for December.

Grayson moved into coaching in the 2004–05 season, managing the reserve squad at Bloomfield Road with some success. He was named caretaker manager of the first team in November 2005, following the departure of Colin Hendry. After diverting Blackpool away from relegation that season he was given the job on a permanent basis for the start of the 2006–07 season. Grayson retired from playing at the end of the 2005–06 season to focus purely on the managerial side of the game.

Grayson moved to Aston Villa in 1997 and made another 49 Premier League appearances at Villa Park, scoring two goals, both of which came in Villa's 1997–98 FA Cup campaign against Portsmouth and West Bromwich Albion. He then signed for Blackburn Rovers in July 1999, where he made 34 appearances in his first season. He lost his place in the team the following season and spent most of the next two years on loan, with spells at Sheffield Wednesday, Stockport County, Notts County (where he scored once against Reading) and Bradford City. Grayson signed for Blackpool on a free transfer on 19 July 2002. He made more than 100 appearances for the Seasiders and captained the side. He started his career at Blackpool in the right-back berth, but was moved to midfield by former boss Colin Hendry to bolster an area of weakness. In 2004 he started the final as Blackpool won the 2003–04 Football League Trophy.

As a player, he was a right back, but he was also utilised in midfield in a career that lasted from 1988 until 2006. Having started his career with Leeds United he played in the Premier League for Leicester City, Aston Villa and Blackburn Rovers, before moving into the Football League with Sheffield Wednesday, Stockport County, Notts County, Bradford City and Blackpool. He was appointed as player-manager of Blackpool in 2005, and a year later retired from playing to concentrate on the managerial side of his job.

He started playing football for Bedale FC after going through high school at Bedale High School. He supported Leeds as a youngster and was proud to be their manager. Grayson began his career at Leeds United in June 1988 as both a defender and a midfielder. However, he did not manage to make the big breakthrough at Leeds, playing just twice in four years. He signed for Leicester City in March 1992 and went on to make 229 appearances in five years. During his time at Filbert Street the team won the League Cup in 1997, with Grayson scoring the goal against Wimbledon which put them in the final, and was voted the club's player of the season in the same year.

Simon Nicholas Grayson (born 16 December 1969) is an English football former player and current manager.