The decision to appoint Neeld to the role fills the vacancy left when James Byrne departed the club at the end of 2014.
His appointment follows Monday's announcement that former Fremantle coach Mark Harvey had returned to the club as an assistant to senior coach James Hird, meaning the club will have at least four men with experience as a senior coach in the football department in 2015.
If Mark Thompson decides to continue at the club after filling in for Hird in 2014, that number will increase to five.
The decision also means Neeld will be re-united with Neil Craig at Essendon after working with him during Neeld's ill-fated 33 games as senior coach at Melbourne.
His time at the Demons finished midway through 2013 when he was sacked and Craig took over as interim coach.
Craig joined Essendon as head of coaching development and strategy in 2014 while Neeld worked for AFL Victoria as a talent manager with the Eastern Region.
Neeld told essendonfc.com.au he was rapt to return to an AFL club.
"I am very excited about this opportunity at the Essendon Football Club," Neeld said.
"Through my years working in the football industry, I have had a strong passion to assist the development of young footballers and watch them strive to reach their potential.
"From what I can see, the club has a terrific young list and I am looking forward to working closely with the coaching panel to foster the progress of our players, particularly in the early stages of their career."
Neeld had a good record as a coach before joining Melbourne, winning premierships at Ocean Grove, experience coaching the Western Jets in the TAC Cup and four years as an assistant coach at Collingwood alongside Mick Malthouse.
Neeld demonstrated his ability working with players at the Magpies and was well respected when he left the club for his work with its midfield and defence.
However, his tenure at the Demons was disastrous with the team winning five games while he was at the club.
While Neeld's time as senior coach was not successful, he is still considered to have plenty to offer in a support role and without the external pressures that comes with senior coaching.
Essendon remains a club with significant hurdles as it prepares for the 2015 season. Hird returns to court on November 10 after appealing a Federal Court decision that determined ASADA's joint investigation with the AFL was lawful.
Craig said told essendonfc.com.au that the club's development program had undergone a significant review at the end of the 2014 season and identified a number of key improvement areas.
Hird said that Neeld's passion for developing young players was evident through the interview process.
"He brings a variety of experience and importantly was involved in a very successful performance environment at Collingwood that achieved the ultimate success in 2010," Hird told the club's website.
Neeld also played football with Geelong and Richmond during the 1990s.
