Madden, 57, was a coach at Stockport for 13 years and also held the number two position at Fleetwood Town.
The former Bury, West Bromwich Albion and Blackpool striker won the National League title during his spell with the Cod Army.
He joins a side that sit 16th and have moved out of the relegation zone since Dino Maamria took over in November.
Southport have appointed Craig Madden as their assistant manager after Gary Finley left the National League side.