The former Bangladesh high-performance head coach and England one-day batsman scored 15,329 first-class runs and played for Lancashire and Northants.
Director of cricket Kim Barnett said: "We're delighted to secure someone of Mal's calibre for the position.
"Mal will now be responsible for identifying and providing additional coaching support to youngsters in and around Derbyshire."
Loye, who played seven ODIs for England in 2007, will be responsible for the club's newly-created development pathway, working with young cricketers from the age of 13 and the club's academy.
"We want to produce cricketers who will go on to play for Derbyshire and potentially England," added Barnett.
"Creating a new senior development coach role and attracting a candidate as strong as Mal demonstrates how important this is to the club."
Mal Loye has joined Derbyshire to take up the position of development coach.