The 54-year-old former Luton and QPR boss was in talks with Newcastle at the weekend over a position assisting director of football Joe Kinnear at St James' Park.
But Harford turned down the opportunity to rejoin the club for whom he briefly played during the early 1980s and will instead be number two to new Lions boss Steve Lomas.
"I'm delighted that Mick has joined us. He's a vastly experienced coach who I have known for many years now," Lomas told Millwall's website.
"Mick will be a great addition to the staff and I'm pleased to have finalised my backroom team.
"I know there was speculation about Mick going to Newcastle because of his past connections with Joe Kinnear, but he's fully committed to Millwall and to doing a job for us here."
Harford added on Sky Sports News: "I've been in talks with Millwall over a period of time and just felt it better suited me at the moment. I didn't feel that at Newcastle."
Lomas has also installed Tim Breaker as first-team coach and Kevin Pressman as goalkeeping coach while club legend Neil Harris, who retired from playing this summer, will work with both the first team and development squads.