The former Northern Ireland international winger made just under 100 appearances for the Valiants between 1995 and 1997, many alongside current manager Neil Aspin.
His former team-mate, who of course was a rival manager in the National League at Gateshead, has appointed the 47-year-old as fitness coach and he will also undertake some scouting duties.
McCarthy, who also starred for York City and Birmingham City as a player and earned 18 full caps for Northern Ireland, was sacked by Chester following a dismal start the campaign and was linked with the vacant position at Southport before it was given to ex-Bolton Wanderers favourite, Kevin Davies.