Downes, a lifelong QPR fan, left his position as first-team coach of Sam Allardyce's West Ham after initially being brought to the club by former Chelsea manager Avram Grant in 2010.
The former Brentford manager joins the club a month after Steve McClaren's brief coaching stint at the club ended when he took over as manager of Derby last month.
Redknapp revealed he is delighted to have the 52-year-old on board and is also looking forward to welcoming McClaren back to Loftus Road for his first visit as a manager of an opposing side.
'I'm pleased to have Wally [Downes] with us," Redknapp said. "He's a QPR man and a top coach. He's a character and very experienced.
"Steve [McClaren] was great for us and I'm sure Wally will be too.
'It was great to have Steve with us. He's another top coach. I was very impressed with him in his time here."
Redknapp insisted Derby will provide stern opposition for QPR this weekend, but revealed he was happy with both his side's progress this season and their performance in the goalless draw at Wigan on Wednesday.
"I'm pleased with how the season is going," he said. "I thought we played well at Wigan. I thought we controlled the game. Hopefully we can keep on winning matches."