The 44-year-old played for the Lancashire outfit between 1999 and 2005.
Short has admitted that it was "an easy decision" to join Gary Bowyer's backroom staff at Ewood Park.
He told the Blackburn's official website: "I had six happy years here.
"I came back for the charity game at the end of the season with some of the old players and I got the same feeling about the place.
"I probably had my most successful time here as a player, so it was an easy decision."
Short has previously managed Notts County and Turkish side Ferencvaros.