Taylor, who as England's caretaker manager in 2000 handed the captaincy to Manchester United's David Beckham, will be an assistant to All Whites coach Anthony Hudson and monitor their players in Europe, New Zealand Football said on Friday.
Hudson was an assistant to the former Crystal Palace and Tottenham Hotspur winger when he was in charge of Bahrain in 2011-2012.
"I have a huge amount of respect for Pete. When I worked with him and certainly everyone I know in football that speaks about Pete hold him in the highest regard," Hudson said in a statement.
"He's a good man, he's great to work with, he's got incredible experience and he will add a huge amount to our team."
Taylor will remain based in Britain to monitor players such as All Whites captain Winston Reid (West Ham) and Chris Wood (Leeds United) and help prepare them for internationals.
New Zealand won the Oceania Nations Cup, the second round of World Cup qualifying for the confederation, in June with the six-team third round beginning in November.
The winner of that round then enters an inter-continental playoff against the fifth-placed South American side.
The All Whites next play Mexico in a friendly on Oct. 8 in Nashville before facing the United States in Washington D.C. on Oct. 11.
(Reporting by Greg Stutchbury; Editing by Andrew Both)
