The 48-year-old spent three seasons at the club as a player during a career that saw him win the Champions League, the FA Cup and three league titles with Manchester United and finish as top scorer in the first season of the Premier League in 1992-93.
"I'm very excited. Sam (manager Sam Allardyce) phoned me a week or so ago and asked me if I fancied it," he said in a statement on the club website (www.whufc.com).
"It was far too good to resist really. Being a West Ham boy and coming from the area, it fits nicely in all that I'm about, what with working alongside Sam and knowing a few of the players as well. They've got a lot of respect for Sam, they speak very highly of him and to know that's the case made me want to get involved."
Sheringham sits ninth in the all-time list of Premier League goal-scorers with 147 in 418 appearances.
Allardyce came under fire from fans last season for West Ham's style, and Sheringham has been handed the task of developing the club's attacking play.
West Ham finished 13th last season, scoring 40 goals in 38 league matches.
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