The former Hoops captain accepted an invitation from manager Gordon Strachan to join his coaching staff, and Lennon will be on the frontline from the start in his second spell in Glasgow.
The 36-year-old said: "I am overwhelmed at being offered this chance to return to Celtic, a place where everyone knows my heart lies.
"Obviously, it was a tremendous honour to play for Celtic and to captain the club. Returning to Celtic and being part of the coaching set-up is simply phenomenal.
"I would like to thank Gordon for this opportunity and I look forward to doing all I can to play my part in achieving further success for the club."
The former Northern Ireland international joins a coaching staff which includes assistant boss Garry Pendrey and first-team coach Tommy Burns.