Ramsay, 63, takes the place on the Oilers staff of Kelly Buchberger, who will transition into a new role in the player personnel department.
Oilers coach Dallas Eakins said Ramsay will handle the Oilers defense and handling the power play.
"This guy has been around the game a very long time and is still ahead of the game," Eakins said.
Ramsay most recently was an assistant coach with the Florida Panthers. He played in more than 1,000 NHL games with the Buffalo Sabres before going on to coach the Sabres, Philadelphia Flyers and Atlanta Thrashers. In the 2000 Stanley Cup Playoffs, he led the Flyers to the seventh game of the Eastern Conference Final.