The 44-year-old returns to Rovers to become a key member of new manager Gary Bowyer's backroom staff.
"It was an opportunity that I couldn't refuse," Short told Rovers Player
. "I had six happy years here.
"I came back for the charity game at the end of the season with some of the old players and I got the same feeling about the place.
"I probably had my most successful time here as a player, so it was an easy decision."
Arriving at Ewood Park from Everton in July 1999, the central defender enjoyed a successful six-year spell with Rovers during his playing days.
A firm favourite with the fans for his wholehearted defensive displays, Short would go on to make almost 150 appearances in blue-and-white, scoring on five occasions and often wearing the captain's armband.
Short moved into management with spells in charge of Hungarian club Ferencvaros and Notts County.
He joins Rovers from Derby County, where he held the role of Head of Academy Recruitment, and will make a swift return to Pride Park on the opening weekend of the 2013-14 season.
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