Capel, who was sacked from his role as head coach at Wantage Road last summer, will take up his role with immediate effect.
He will work alongside Carl Crowe and under Paul Shaw who was recently appointed role head of England Women’s performance.
Capel, 50, played in 15 Test matches and 23 one-day internationals for England between 1987 and 1990 and had 17 years experience in county cricket with Northamptonshire.
Having been Academy coach at the County he was elevated to head coach following the departure of Kepler Wessels in 2006 and stayed in the position until 2012.
In addition to his County role he also coached on the England Lions programme and the England Under-17 and Under-19 winter programmes.
Capel said: “I am thrilled to have the opportunity to take on the role.
“The team has consistently been at the top of the world game for over five years now and there are some really exciting challenges ahead in the next 12 months, with back to back Ashes and the ICC World Twenty20 scheduled for Bangladesh in early 2014.
“I look forward to working closely with a hard-working and talented group of players and staff.”
Head of England Women’s cricket, Clare Connor added: “The interest in this role was overwhelming and David Capel shone at interview.
“He is a high-quality individual with a strong work ethic and an enormous passion for the game.
“I believe he will bring vast technical and tactical expertise, a wealth of experience and a level of intensity that the players will thrive on.
“I know that adding David to an already strong coaching team will accelerate the development of players within the England Women’s programme, as they prepare for an exciting and challenging 12 months of international cricket.”