Volkswagen driver Mikkelsen was forced to make a late withdrawal from Rally Germany after scans showed regular co-driver Mikko Markkula had sustained two fractured vertebrae.
Nagle will now step in to partner Mikkelsen and allow Markkula time to recover.
Mikkelsen and Nagle have competed against each other previously in the 2007 Rally Ireland, when Nagle was co-driver to Kris Meeke. The latter pair also won the Intercontinental Rally Challenge crown in 2009.
Volkswagen motorsport director Jose Capito said he was delighted to be able to bring in a co-driver of Nagle's quality in such a short space of time.
"We are pleased to have found such a competent replacement so soon after Mikko's withdrawal," Capito said.
"Paul has a wealth of rallying experience and, with his professional approach, will definitely meet our expectations. W
"We wish Mikko a speedy recovery. He can now take his time and concentrate fully on ensuring he gets back to full fitness.
"As soon as he has recovered from his injury, he will take his place next to Andreas again."
Mikkelsen said he hoped for a seamless transition, adding: "For me, it was important to find a co-driver with whom I can communicate in English in the cockpit.
"Mikko and I changed the style of our pace notes ahead of this season, and both switched from our native language to English.
"It is an advantage for me not to have to change language again."
Rally Australia, round 10 of this year's championship, takes place on September 12-15.