The 48-year-old was appointed to the Sharks' rugby strategy management board as part of a coaching restructure last month after doing some work for the club as a consultant.
At that time Mitchell was still head coach at South African side Golden Lions, where he had been suspended on misconduct charges.
He was subsequently cleared and then resigned from his position, freeing him up to take up his post with Sale, where he served as a player-coach in the late 1990s.
Sale have not confirmed what title Mitchell will take but he will join chief executive Steve Diamond, head coach Bryan Redpath and businessman Ian Blackhurst on the strategy management board.
He flew back into Manchester on Tuesday and took a coaching session on Wednesday morning.
The Sharks are hoping his influence will help them pull clear of relegation trouble, having been cast five points adrift at the bottom with one win from nine games.
Mitchell said: "Dimes (Diamond) sort of gave me an SOS call to see what was happening.
"At that particular time I was in suspension and had to go through a process. I'm thrilled to have got through that process to be found innocent of all allegations.
"The next thing was to be reinstated in my position and then, at that point, I mutually agreed with the Golden Lions that they have moved on and emotionally I have moved on.
"That's what I had to get done. It's taken a lot longer than I would have hoped.
"It's been six months and five days of a hearing, so it's been an arduous process but I had to get everything cleared so that I could move on. My reputation is still very much intact and also my brand."
Sale announced sweeping changes to their structure on October 31, with rugby director Redpath moved to a new position.
Since then former Sale hooker Diamond has taken a more hands-on role in the coaching department while awaiting Mitchell's arrival.
Mitchell took up a role on the England coaching staff after his first stint at Sale and then led the All Blacks at the 2003 World Cup.
Mitchell said: "I've been talking to Dimes about certain ideas to help move us forward.
"I was always committed to coming back. I said to Steve that I wouldn't let him down.
"I would have liked to have been here sooner but obviously I was still employed by the Lions. There was a lot of speculation but I was always coming back.
"In this situation now at Sale Sharks, the reality is that we are bottom of the (table).
"It's not going to be an easy job but I think there are a couple of immediate issues.
"I think some players need to increase their desire and their performance within the group.
"They need to have a far greater collective desire to change this and we need to play more pressure football.
"If there is one thing I've noticed, it's probably that were playing at the wrong end of the field and we need to create more pressure as a team.
"We seem to be quite comfortable and enjoy playing with the ball but I'd like to see us get a little more excited without the ball and create more pressure at the right end of the field."
The Sharks face Northampton at the Salford City Stadium in the Premiership on Friday.