The 36-year-old previously worked with the Young Lions in February 2012, backing up coaches Brian Eastick and John Peacock for the Euro 2013 qualifier against Belgium - a 4-0 victory - while boss Stuart Pearce and his assistant Steve Wigley looked after the senior side for one match.
Neville, who has won 59 senior England caps, said: "It is a fantastic opportunity for me to work with the best young players at under-21 level."
He added: "I had a little taste of this against Belgium and it was probably the best three days I have had - it was a real eye-opener.
"Those three days told me that coaching is what I really want to do.
"The thing I noticed about the under-21s is that there is a great spirit amongst the staff and the players, and there is a real togetherness and determination that they want to win this tournament.
"If I can play a small part and learn from it then it will be great."