The 59-year-old, who previously worked for the club as their academy director, is leaving the Football Association after 21 years with them.
Peacock comes in after Paul Simpson left Derby over the weekend ahead of a move to Newcastle, where he will be reunited with Steve McClaren following his switch from the iPro Stadium.
The outgoing coach admits leaving the FA will be a wrench after he led England to the European U17 Championship title in 2010 and 2014.
Peacock also led them to qualification for the U17 World Cup in Chile this October and said: “This has been one of the most difficult decisions I have had to take.
“Leaving an organisation like The FA, where it has so many outstanding individuals, has not been easy. It has been an absolute privilege to work here for two spells spanning a total of 21 years.
“Developing so many talented young elite players through the England international youth teams programme these past 13 years has been an amazing experience.
“We have very talented players in this country and to play a small part in their development has been challenging and extremely rewarding for me personally.
“It is in respect of a further challenge which has subsequently taken me towards making this difficult decision.
“The last 25 years of my working life has been spent with The FA and Derby County FC. The chance to work once again at this fantastic club was an opportunity I couldn’t decline.
“It is always refreshing to see an English coach succeed. Furthermore it is even more difficult for this to happen abroad.
“In Paul Clement we have this person after his successful spells at Chelsea, Paris St Germain and, of course, Real Madrid.
“I was delighted when Paul offered me this opportunity to assist him in his role as the head coach of Derby County FC. I am really looking forward to the next chapter in my coaching career.”
FA technical director Dan Ashworth said: “We will sorely miss John and I can only thank him for his contribution, both as a coach and a coach educator. His record speaks for itself.
“Derby have a fine coach to supplement the work of Paul Clement. On behalf of everyone at The FA, I would like to wish John well – he leaves behind a great legacy through his work.”