Holland is the assistant first-team coach at Stamford Bridge and began his coaching career under Dario Gradi at Crewe, where he spent 17 years before joining Chelsea in 2009 after a spell at Stoke.
Holland will link up with Southgate for the qualifiers against Moldova and Finland as the new boss prepares to take charge of his first matches.
"I'm delighted that we will have the input and experience of someone of Steve's calibre joining us for these two games," Southgate said.
"He brings a great knowledge of coaching, working with some of the very best young players over a long period of time. I was keen to bring in someone who has a wealth of experience in youth development, as Steve does, with both Crewe and Chelsea.
"But it's also significant he has worked with players at the highest level in
an elite field. Indeed in recent years, he has worked with a group of players who have won FA Cups, Premier League titles and the UEFA Champions League.
"I must also thank Jose Mourinho for his support in Steve coming into the set-up. To have not only the consent, but also encouragement and backing of Chelsea is very important to us."
Holland revealed his excitement at the prospect of helping to develop a new generation of England players.
He said: "The international break at Chelsea is always a very quiet period as we have so many players away representing their countries and often only three or four players remain at Cobham, so Jose Mourinho was very happy for me to be involved and very supportive.
"I met Gareth Southgate this week and we spoke about plans for the England Under-21 team and the FA are looking forward with Roy Hodgson and the England senior side.
"We spoke about the type of player they are looking to select going forwards, the playing style that the FA are looking to apply across all the national teams now and I was very impressed.
"I think it is an exciting time to be involved as I believe there is a strong will within the FA to try to improve the development of our young players, and I am very excited to be asked to be involved."
The England Under-21 team begin their qualification campaign towards Euro 2015 at Reading's Madejski Stadium on September 5 against Moldova and then travel to Finland four days later.