Carden has worked alongside Tranmere manager Gary Brabin previously at Luton Town and Cambridge United, before being Brabin’s assistant at Southport.
He was appointed Southport manager in January 2015 and kept the club in the National League before leaving them last November.
The 37-year old replaces James Quinn on the Rovers coaching staff, with Quinn leaving the club to pursue his career overseas.
Brabin said: “I’m delighted to bring Paul to Tranmere. “He’s an excellent coach and someone who will work well with the players we’ve got at the club.
“I know him well and he’s someone who will be very vocal and won’t be afraid to voice his opinion on the training ground and on matchdays.
“I’d like to wish James the best of luck and thank him for all his hard work last season”.