The 66-year-old, who guided New Zealand to victory on home soil last year, has been appointed as a technical advisor to assist new head coach John Kirwan.
Henry was in charge of the Blues from 1996 to 1998 when they won two of their three Super Rugby titles.
Kirwan has also brought in Mick Byrne and Grant Doorey, who worked with him when he coached Japan, to help turn around the fortunes of the Blues.
"We've got a lot of work ahead of us but I believe the combination of this coaching group puts the Blues in good hands for 2013," said Kirwan.
The Blues finished 12th on the Super Rugby ladder in 2012 after registering just four victories all season.