Watson, a former assistant manager at Glasgow Rangers, Birmingham City and the Scottish national team, is the first addition to manager Chris Kiwomya’s new-look backroom team ahead of the 2013/14 season.
The 53-year-old former midfielder arrives with a strong reputation in the game, having worked alongside Alex McLeish to secure two Scottish Premier League titles with Rangers and Carling Cup success with Birmingham.
Speaking to the club’s Magpie Player, Watson said: “Having spoken with Chris and Jim Rodwell, I know that they’ve got a love and a passion for the club.
“I want to have that love and passion and I’m sure I will, but the one thing they will get from us is hard work and a desire to do well.
“I hope to impact some of the experience I’ve gathered along the way and take the boys forward so that they can challenge next year.”