The 49-year-old, who was born in the county in Corby, enjoyed a fruitful 20-year career as a player after progressing through the youth ranks at Grace Road, and was part of the Foxes side that won the County Championship in 1996.
Smith later moved on to Worcestershire, where he captained the first team for two seasons.
He played in 334 first-class matches in his career, scoring just shy of 19,000 runs and notching up 40 centuries and also brought up a ton of half-centuries, scoring exactly 100 50s.
He also made 450 appearances across the List A formats of 60, 50 and 40 overs as well as in Twenty20 cricket, making more than 10,000 white ball runs.
“I’m delighted to have joined Northamptonshire and to be working alongside John Sadler and his coaching team," said Smith, who last week left his role as a batting and fielding consultant to Cricket Ireland.
"It’s a great opportunity and I’m just really looking forward to getting back into county cricket.
“I’ve spent the last couple of seasons on commentary watching Northamptonshire on and off through the season, and really enjoyed watching how they played their cricket.”
After his retirement from playing, Smith enjoyed coaching roles at both Leicestershire and Worcestershire, as well England Lions and the Central Stags in New Zealand.
He has been part of the Irish coaching set-up since 2017, and worked closely with the Ireland squad following the country's elevation to ICC Full Member status.
At Wantage Road, Smith will take up the batting coach role that was held by Sadler until his promotion to head coach at the end of the 2021 season.
Chris Liddle remains as bowling coach and will work as the assistant coach to Sadler, with Graeme White now the first team's lead fielding coach and spin bowling coach, as well as being in charge of the second XI.