The 46-year-old has paid the price for a dismal run of form that has seen the Saints win just one of their past 17 matches.
That latest setback left Saints languishing just one place and one point above the relegation zone.
Assistant manager Carlos Compagnucci and assistant first-team coach Xavier Tamarit have also parted company with the club.
Saints were beaten 3-0 at Newcastle on Saturday and lie just one place and one point above the relegation zone.
Marco Silva, out of work since being sacked by Watford in January, could be considered again though any approach would be complicated by the fact he was overlooked by Southampton last summer in favour of Pellegrino and interest from Benfica.
The former England boss is THE anti relegation specialist, becoming the firefighter to extinguish all relegation threatened Premier League blazes, having never been previously relegated in his career. As for Puel, he is now in charge at Leicester who, ironically, are eighth in the Premier League, the position that Saints were when they fired the Frenchman.
Welshman Mark Hughes was firming as the bookmakers' favourite to replace Mauricio Pellegrino as the south coast club's manager.
The Argentine was unable to add more attacking flair to a team that struggled for goals toward the end of last season under Claude Puel, and fans have recently been calling for Southampton to play two strikers up front to be more of a threat.
Southampton are hoping to announce their new manager before they visit third-tier Wigan Athletic in the FA Cup quarter-finals on Sunday with their next league game not until March 31 when they travel to West Ham.
- Parent to sell TCS stake
- Pakistan to play three T20Is with West Indies in Karachi
- Baaghi 2 song Lo Safar: Tiger Shroff pines for Disha Patani
- Bills have 'some interest' in QB Sam Bradford — NFL free agency
- Wolves remain long odds-on to win the league despite poor run
- BBC Appeals to UN Over 'Collective Punishment' of Its Journalists by Iran
- USC Earns No. 2 Seed in NCAA Woman's Basketball Tournament
- Record number awaiting admission to hospitals today, 24 at LUH
- China asks United Nations , global community to respect PH sovereignty
- SBI reduces minimum balance charges to Rs 15: Check out new rates