Gray, 52, who had spells at Nottingham Forest, Bolton, Barnsley, Aston Villa and Southampton during his playing career, has spent the last two decades as a coach and had stints as caretaker manager at Southampton and Burnley.
The 52-year-old, who has worked with Jones at St Mary's Stadium and Molineux, spent two years as manager of Northampton from 2007.
Jones said: "I've brought Stuart in because he's an older head than the coaches I have, he has a vast amount of experience.
"He'll become part of the coaching team and everybody at the club will benefit from his experience and knowledge.
"I've worked with Stuart before for around seven years and that played a big part in my decision to bring him to the club.
"It underlines my philosophy of never standing still and always looking to build. I would like to welcome Stuart to Sheffield Wednesday."
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