The 61-year-old has been appointed No 2 to Graeme Murty after Falkirk agreed to allow him to move on from the same role under Paul Hartley.
Nicholl, who has also been assistant to Northern Ireland manager Michael O’Neill in recent years, had two playing spells at Ibrox in the 1980s.
“I got the opportunity all those years ago with John Greig and Jock Wallace, and then I thought that was going to be it, I’d had my wee spell and fulfilled one of my ambitions,” Nicholl told the Rangers website.
“Then, three years later I was back with Graeme Souness and Walter Smith. Again, I thought that was it after that. But 30 years later to have the opportunity to go back to Rangers as assistant manager with Graeme Murty, I am so excited and chuffed to bits.”
Nicholl has been brought in to provide Murty with experienced assistance after the 43-year-old was promoted from his role as under-20s coach following two spells as caretaker manager last year.
The former Manchester United and Northern Ireland full-back has managed Raith Rovers – guiding them to a League Cup final victory over Celtic in 1995 – as well as Millwall and Cowdenbeath and been assistant to Jimmy Calderwood at Dunfermline, Aberdeen and Kilmarnock.
He will fly to the United States this weekend ahead of a training camp and two games against Brazilian opposition in the Florida Cup.
Nicholl said: “I know so many of the staff and the guys in the academy, and that’s great as it means I’m not walking into a strange environment where I’m having to spend time getting to know everybody.
“It’s a good opportunity now to be away in Florida for this length of time to be around the training ground and the hotel with the players without it being a pressurised situation.
“For the last three years, I’ve been doing the Northern Ireland stuff with Michael O’Neill and checking up on players, and I enjoyed that break from full-time football.
“There comes a time when you realise you miss the day-to-day stuff.
“But Paul Hartley gave me an opportunity to get back into it at Falkirk, and I’m disappointed to be leaving them in the same position as we arrived. I would like to thank Paul and Falkirk for allowing me to take this opportunity.”