Thompson spent the past four seasons as an assistant coach with the AHL's Oklahoma City Barons.
The 36-year-old joins Dallas Eakins' staff along with Craig Ramsay, who was hired earlier this off-season. Thompson and Ramsay replace Steve Smith and Kelly Buchberger.
Before working in the Oilers' organization with the Barons, Thompson was an assistant for the WHL's Edmonton Oil Kings.
Thompson, a third-round pick of Calgary in 1995, played 25 NHL games for the Flames and Florida Panthers.