The Football Association on Tuesday confirmed that Everton captain Neville will join the Young Lions coaching staff for this summer's European Championships in Israel.
The 36-year-old previously worked with the Under-21s in February 2012, backing up coaches Brian Eastick and John Peacock for the Euro 2013 qualifier against Belgium - a 4-0 victory - while Pearce and his assistant Steve Wigley looked after the senior side for one match.
Speaking about Neville, Pearce said: "It's a volatile profession, the one we are in, but I think if I am looking at any individual who is going to give himself every opportunity to be a good manager or a good coach, I think Phil has that personality and those skills.
"I think he's got the respect of players. He is a current player and anyone in our squad will certainly have heard of him and seen him play, and maybe played against him.
"He comes with a real enthusiasm - he wants to be a coach, and you can tell that by the way he carries himself. I think he is a student of the game.
"He really has that mentality to be coach - not just sitting back and saying, 'I'm a professional footballer, it should be handed to me'.
"He wants to go out and work, and has that mentality about him. I think he has got all the right personal skills to be a good coach."
Neville, whose playing career at club level has been overseen by Manchester United manager Sir Alex Ferguson and Everton boss David Moyes, has 59 senior England caps to his name and said: "It is a fantastic opportunity for me to work with the best young players at under-21 level.
"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 among 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 it 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 was today at St George's Park, where the England Under-21 squad were preparing for friendlies against Romania at Wycombe's Adams Park on Thursday and Austria at Brighton's Amex Stadium next Monday.
After that double-header, Pearce will name his 23-man squad for the Euros, which take place in June and see England compete in Group A with Italy, Norway and hosts Israel.
Neville's older brother and former Manchester United team-mate Gary is part of the coaching staff for the senior side, having been appointed by head coach Roy Hodgson last May.
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