The 48-year-old, who has held the same job at Burton and QPR, has agreed a two-year deal with the League One side.
The former Posh player will work with Grant McCann, who has also brought in Mark Tyler as goalkeeping coach.
"What he achieved with Burton alongside Jimmy was superb. It's a great addition for the football club," McCann said.
"David is very demanding and thorough. He says it how it is. His training sessions were intense and structured and that is what I am all about too."
Tyler, 40, has made 494 appearances for the club and is yet to retire, so could still feature as goalkeeper for Posh.
David Oldfield has been appointed assistant manager at Peterborough United after spending a month in the role on a trial basis.