Unintentionally I disconnected my IPod incorrectly and now iTunes does not recognize the IPod (4th generation). What can I do to fix it?

1. Open Disk Utility.
2. Choose your ipod on left.
3. Create Single Partition and format it to OSX Extended (Journaled).

Thats all itunes shall recognize now. Just eject and insert it again.

Note : Formatting erases your data, so if you do some mistake in step 4 (like selecting some other device instead of ipod) data on selected device will be lost.