The former Scottish footballer was part of Jose Mourinho’s title winning backroom team at Chelsea, and has coached alongside Gianfranco Zola, Ruud Gullit and Avram Grant.
The 47 year old spent his playing career at St Mirren and Chelsea before retiring and taking up coaching in 1998.
Roy Hodgson had brought Mike Kelly with him from Fulham, but there have been widespread rumours that he has not gelled with the Liverpool playing staff. No announcement has yet been made by the club on his position, and he attended training with the players this morning.
New manager Kenny Dalglish said:
“Steve is a great addition to our backroom team and I’m delighted we’ve been able to bring him into the club.
“I am looking forward to working with Steve alongside Sammy Lee and our other technical staff.”
In his afternoon press conference, Dalglish referred to himself, Lee and Clarke as very much a three man team and was not drawn in to specifics of the titles of their roles. Ian Ayre stressed that Steve had joined initially until the end of the season.