Southee, whose test haul of 391 wickets is second only to Richard Hadlee's 431 among New Zealand bowlers, retired from the longest format of the game in December last year.
Southee takes over the role at KKR from Bharat Arun, who has joined Lucknow Super Giants (LSG) as their bowling coach. The former seamer has been involved in coaching since his retirement, serving as England's fast-bowling consultant.
The 36-year-old returns to KKR, having been part of their squad from 2021-2023.
"KKR has always felt like home to me, and it's an honour to return in this new role," Southee said in a statement.
"The franchise has an incredible culture, passionate fans, and a great group of players. I look forward to working closely with the bowlers and helping the team achieve success in IPL 2026."
Former Australia all-rounder Shane Watson was also named as KKR's assistant coach on Thursday.
KKR, three-time IPL champions, last lifted the trophy in 2024.
Kane Williamson, New Zealand's all-time leading test run-scorer, has also stepped into a coaching role in the IPL. The 35-year-old joined LSG as a strategic advisor ahead of IPL 2026.