The central defender has worn the armband for Rovers' last two outings and that will now continue.
Explaining his decision, the manager said "It was a difficult decision to make but I think it is one that is going to benefit everyone.
"Danny took it very professionally as I expected him to do. He's an experienced player, these things happen, and you have to make these decisions sometimes.
"Moving forward I think it is going to be the best thing for the football club as a whole.
"Scott is someone who leads by example and I think his two performances since he took over the role have been magnificent."
Dann will lead the team out at Ewood Park for the first time on Wednesday night when Rovers take on Millwall in the FA Cup quarter-final replay.
Supporters are advised to get their tickets in advance of Wednesday's match as large queues are expected in the run-up to the 7.30pm kick-off.
Tickets are priced at £18 for Adults, £12 for Seniors/Students and £6 for Juniors under 16.
Book online today at www.onerovers.co.uk
and collect your tickets from the Blackburn End colleciton point nice and early on the day of the game.