The 40-year-old made 250 appearances for Wimbledon from 1991 until 2002 and was part of the side that finished sixth in the Premier League in 1994.
Club chief executive Erik Samuelson told the club's official website: "We put the candidates through a very exacting interview process.
"They were all very impressive but it wasn't difficult to pick out the outstanding candidate for the role.
"With four graduates from our academy already in the first team squad, Neal's background in bringing through young players fits perfectly with our commitment to youth development. We are looking forward to working with him."
Former Aston Villa defender Neil Cox has been appointed as the club's assistant manager.