Margolis is best known for his role as the mute, wheelchair-bound villain Hector 'Tio' Salamanca on AMC's Breaking Bad.
The 72-year-old has now been cast in the recurring role of Sam Goodwin in American Horror Story's second season, subtitled Asylum, according to Entertainment Weekly.
Amy Farrington (Hung) and David Chisum (One Life to Live) have also signed up for roles on the show.
Maroon 5 frontman Adam Levine, Big Love's Chloë Sevigny and The Bourne Identity star Franka Potente will also appear in the new episodes.
American Horror Story returns to FX and FXUK in October.
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Watch a new promo for American Horror Story below: