Thompson, 36, had been an assistant coach for the past four seasons with the Oilers' American Hockey League team, the Oklahoma City Barons. He spent four seasons as an assistant coach with the Edmonton Oil Kings in the Western Hockey League.
"I bring a lot of energy, I am full of energy, and I have a lot of passion for the game," Thompson told the Oilers website. "I've been an Oiler for I believe 10 of the last 12 years as a player in the organization, a coach in their junior system, all the way up to the Oklahoma City Barons, and now I'm getting an opportunity in the NHL. I feel like I have been an Oiler for a long time and I'm excited to be a part of it at the highest level possible."
Thompson replaces Steve Smith, who joined the Carolina Hurricanes as an assistant on June 23. The Oilers added Craig Ramsay to their coaching staff on June 10 after longtime assistant Kelly Buchberger was reassigned to the player personnel department.
"I'm absolutely excited," Thompson said. 'There's no doubt about it. It really is a dream come true. Twelve years ago was the last day I spent in the NHL as a member of the Florida Panthers at the time. Ever since that point I have been working to get back up, and when the playing ended and my coaching career began that's obviously the ultimate goal for anybody to achieve.
"I am so grateful that they're putting confidence in me to come up and join a great coaching staff here, so I am extremely excited."