The 36-year-old Everton captain was involved as part of the backroom staff for the 4-0 win over Belgium in February, 2012, and will now take a similar role in Israel
The 36-year-old, who was involved with the Under-21s in a backroom role in the build up to their 4-0 win over Belgium in February, 2012, will be part of the coaching setup at the tournament in Israel which will take place between June 5 and June 18.
“It is a fantastic opportunity for me to work with the best young players at Under-21 level," Neville told the Football Association's website.
"I had a little taste of this against Belgium and it was probably the best three days I have had – it was a real eye-opener.
“Those three days told me that coaching is what I really want to do. The thing I noticed about the Under-21s is that there is a great spirit amongst the staff and the players, and there is a real togetherness and determination that they want to win this tournament.
"If I can play a small part and learn from it then it will be great. In tournament football you learn so much. You learn how to handle players in a different environment and how to get the best out of players.
"As a coach is more intense during a tournament as you have got so many games to watch, videos to prepare and then you have to plan and manage your squad.
“I have been to three major tournaments as a player and to now sample it on the other side will be a great chance for me. I am looking forward to working with the best young players this country has got.”
Neville, who has 18 Premier League appearances for Everton this season and 59 caps England, has been welcomed by Under-21s boss Pearce ahead of the tournament.
“Phil is treading a path towards building up his coaching credentials and has demonstrated his commitment to this by taking time out of his own summer to join us in Israel," Pearce said.
“For The FA it’s important to encourage young coaches to take such opportunities and we’re pleased that Phil will be with us during the tournament.
"Not only is it a good opportunity for Phil to learn from our environment, but it is also a chance for the young players to work with Phil. Everyone benefits from this arrangement.”