Having broken through the club's youth system, Ramage spent four seasons as part of the Magpies' first-team setup between 2004 and 2008.
"As you can tell I can't stop smiling," he told Newcastle's official website.
"Having come through the ranks as a player and having started my coaching career there with the under-13s and I know it is an old saying but it is a dream come true to be coming back to the football club again.
"I am from the area, my family are from the area and I have never really hidden the fact it is my club so when I left in July 2018 I always had it in the back of my mind that I wanted to return.
"I have had a great experience out here in Phoenix. They have helped me develop as a coach and now feels like the right time to come back."