Newton is no stranger to the club's fans having played alongside Di Matteo in the Blues midfield, while he also worked previously as a coach with the Italian when he was in charge at MK Dons and West Brom.
Chelsea are having to reshape their staff as fitness coach Jose Mario Rocha and chief opposition scout Daniel Sousa have followed Andre Villas-Boas out of the door at Stamford Bridge following the former manager's sacking yesterday.
Newton, who along with Di Matteo were the goalscorers when the club won the FA Cup back in 1997, spent almost a decade of his playing career with the Blues before injury brought a premature end his career.
The 40-year-old will work closely with Steve Holland, who is to remain as assistant first-team coach while Chris Jones is to step up as fitness coach with the senior squad following Rocha's exit.
Goalkeeping coach Christophe Lollichon is also staying on in his existing role for the foreseeable future.