Crossley, a Wales international goalkeeper, joins manager Danny Wilson's backroom staff as the Tykes attempt to drag themselves out of the Championship drop-zone.
The Barnsley-born 44-year-old was handed his debut by Forest's legendary former manager Brian Clough and made over 300 appearances for the City Ground side.
He picked up eight caps for Wales during a playing career which also featured spells at Middlesbrough, Fulham, Sheffield Wednesday and Oldham.
Crossley began coaching at Chesterfield, where he had a stint as caretaker manager, and was also given a role with Sheffield Wednesday's academy.
Barnsley moved within three points of safety after Tuesday's 3-1 win at Reading and will face drop rivals Yeovil on Saturday.