Neville has signed for the same four-year term as the 64-year-old Hodgson, paving the way for kind of succession that has proved so successful for France and Germany.
Neville is a bold appointment by Hodgson, and a brave one by the FA given the former Manchester United captain's radical views about the body.
Sportsmail can reveal that Hodgson considered both Gary and his younger brother Phil before making the approach to the older of the two former England defenders.
He consulted Sir Alex Ferguson and David Moyes, and while both managers provided a glowing reference, Moyes did raise the concern that it was too big a step while Phil was still Everton captain.
It is possible that Hodgson would have found a role for both of them. Last night it was suggested there could be one further addition to a coaching staff that now includes Ray Lewington, Dave Watson, Ray Clemence and Neville.
But Neville, who was capped 85 times by England, has already acquired his UEFA A licence and will begin studying for his Pro Licence, is sure to be welcomed by the country's current players.
The appointment could lead to certain complications, not least when it comes to Neville's decision to remain a Sky pundit. The FA are surprisingly relaxed, despite the possible conflicts if Neville has to give his verdict on a member of the England squad.
When Fabio Capello launched his online 'Capello Index' before the last World Cup he was forced to distance himself from the project. Yesterday Sky said it will be 'business as usual' for Neville next season with his TV commitments not involving international weeks.
The FA, meanwhile, say they regard Neville's future TV appearances as a 'bonus' because it gives the ruling body a presence they didn't have before on Sky. T
he FA point to having had no issues with Gareth Southgate, in line to be the next FA technical director, mixing his Wembley role with being an ITV pundit on England games - something he is due to do at Euro 2012. Southgate tends to be less forthright than Neville, who is also being allowed to continue his column in the Mail on
Sunday.
Experience: Neville won 85 caps for England as a player
He is sure to offer better value for money, both in work ethic and passion, than Capello's Italian backroom staff.
'Gary has achieved so much as a player with Manchester United and England,' said Hodgson on Monday. 'He has Uefa coaching qualifications and will be tremendously respected by the players.
'At my first meeting with the FA, I explained that Gary was someone I wanted as part of my staff. It is very important we have a younger coach who knows the dressing room and is very experienced at international level. That he has represented England as a player at five major finals tournaments will make him invaluable.'
Neville said: 'Roy asking me to be a part of his staff and to work with the national team is a very special moment. I had no hesitation in accepting this role and I am relishing the opportunity to work alongside Roy and the team at the Euros and through to the next two tournaments.'
Hodgson names his 23 man squad for the European Championship at Wembley on Wednesday. As of last night he had not contacted Rio Ferdinand or John Terry, but those calls are expected to come on Tuesday.
Red Devil: Neville had a successful club career with Manchester United
Parker has been suffering with an achilles injury and Walker limped off during Sunday's 2-0 win over Fulham with an ankle knock.
Hodgson, however, is sure to face one or two questions tomorrow about Neville's appointment. It is a courageous move but also controversial given certain aspects of Neville's history.
He is Red Nev, who tried to lead a players' strike in 2003 over the FA's handling of the Ferdinand drug case. He also accused the FA of being 'inconsistent and half-hearted' when they stripped Terry of the captaincy earlier this season.Read more
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