The 44-year-old returns to Rovers after a 13-year absence to assist Eric Kinder with the development squad.
Sydney-born, the former goalkeeper was signed by Roy Hodgson from Coventry City in August 1999. Filan enjoyed a four-and-a-half-year spell at Ewood Park, making 75 appearances for the club.
After leaving Rovers in December 2001, the popular stopper spent over six years with Wigan Athletic before hanging up his gloves and returning to Australia.
Filan returned to the UK 18 months ago and this summer bumped into assistant manager Terry McPhillips, who set the ball rolling for his Rovers return.
"It was a chance meeting between Terry and myself," said Filan.
"Then I got a phone call from Gary and the boss asked me to come up and talk to him about helping out with the goalkeepers, as (goalkeeping coach) John Keeley had an injury. Obviously pre-season is an important time, so they asked me if I'd help out with the keepers.
"So I came up and enjoyed the five weeks and in the process the Under-21 job was open. I've always been interested in the outfield side of things since I've finished playing, so it has just come around that way and thankfully they have taken me on, so I am really happy.
"Obviously I've been away from here for a long time, but when I walked back in it had the feeling I had when I first came here in 1997.
"When I played I always said it was a real privilege to play for Blackburn - it has fantastic facilities. My focus now is on doing my best for our younger players and trying to develop them."