WASHINGTON (CNN) -- Tammy Duckworth, an Iraq war veteran who lost her bid for an Illinois congressional seat, has been appointed to direct the Illinois Department of Veterans Affairs, Democratic Gov. Rod Blagojevich announced Tuesday.

"Tammy Duckworth embodies the new generation of American veterans," Blagojevich said in a statement. "She has been an inspiration to people all over the country, showing extraordinary personal strength and speaking out on behalf of soldiers who are coming home from the wars in Iraq and Afghanistan"

Duckworth, a Democrat, lost to Illinois GOP state senator Peter Roskam by less than 5,000 votes in her bid for outgoing GOP Rep. Henry Hyde's congressional seat. Hyde has held that seat for 32 years.

The Iraq veteran lost both her legs in 2004 after a grenade struck a helicopter she was piloting.