During the 2010 season at North Texas, he was promoted from offensive coordinator to interim head coach after the mid-season termination of his predecessor, Todd Dodge. North Texas averaged 33.8 points a game after Canales took over as head coach, after averaging 16.9 points in the first seven games of the season. Canales amassed a 2–3 record as the interim head coach of the Mean Green.
Despite North Texas players' support for Canales, the full-time head coaching position was awarded to former Iowa State head coach Dan McCarney. McCarney retained Canales as offensive coordinator.
Canales took over again on an interim basis after McCarney was fired five games into the 2015 season, a stretch in which North Texas went 0-5. Following a 1-6 record in his second interim tenure, and athletic director Rick Villarreal announced Canales wouldn't return in any facet for the 2016 season.
On January 19, 2017, Canales was hired as the quarterbacks coach at the University of Tennessee.