The 33-year-old, who announced his retirement earlier this month after a successful battle against acute leukaemia, will take up a new role as assistant to development coach Gordon Cowans.
Petrov said: "I'm very excited by this new challenge and I wish to thank the club and the manager, Paul Lambert, for giving me the opportunity to continue my association with Villa, which I have always regarded as a privilege.
"I will study for my coaching badges over the coming months and I am looking forward very much to working with Gordon Cowans, someone I know and respect, a true Villa legend.
"My hope is that I can assist Gordon through my own experience in the game and that I can help the young lads to progress, become better players and better human beings.
"There are important values that we have always stood for at the club and we will continue to do so."
Lambert invited Petrov to sit on the bench for Sunday's Premier League game at Wigan and the Villa boss believes he will be a success as a coach.
"He's always been one of the most committed, dedicated and driven individuals and he's always strived to be successful," said Lambert.
"As an international player, too, he' been around the block. He's been the captain at a big club and he's captained his national team, Bulgaria, so his knowledge is of the highest order."