The Rangers' managers suspension relates to an incident on Monday during and after the 3-1 defeat to Watford at Vicarage Road.
A statement on the official Rangers website reads: "Manager Jim Magilton has been suspended with immediate effect, pending an internal investigation.
"The suspension relates to an incident which occurred at Monday's Championship fixture against Watford at Vicarage Road.
"The Club will be making no further comment at this stage."
Youth team coaches Steve Gallen and Marc Bircham have been placed in temporary charge of first team affairs.