Nicknamed Psycho, the former Nottingham Forest defender played in a World Cup semi-final in 1990 but has signed for a team dubbed "the worst in the UK".
Longford AFC, based in Gloucestershire, have lost all 18 games this season, scoring one goal and letting in 179.
Pearce said the grassroots game was "essential" to the sport's lifeblood.
"I started out in non-league football playing for Wealdstone before joining Coventry City," he said.
"So I'm looking forward to working with manager Nick Dawe, and helping a group of talented young footballers achieve their dreams and, hopefully transforming both the dressing room confidence, as well as the on-the-pitch performance, and seeing how far they can go up the league."
179
goals conceded
0-17 Loss at home to Bibury
16-0 Loss away to Lydney Town Reserves
0-15 Loss at home to Quedgeley Wanderers
14-0 Loss away to Woolaston
Longford AFC are rooted to the bottom of the Gloucestershire Northern Senior League Division Two.
With an awful record and a growing interest from the media, the side has been dubbed "the worst team in England".
But that could change following the recruitment of their star January signing, who is expected to train with the squad before playing one game with them.
Nick Dawe, Longford AFC manager, said the opportunity would give the side "the best chance possible to go further than we ever have done before".
"A year ago we were playing in front of one man and his dog and now we are set to [attract] hundreds for Stuart Pearce's debut," he added.
"Stuart knows that there will be no special treatment, he will still need to pay his Â£5 a game subs."
Pearce, a winner of 78 England caps, was part of Sir Bobby Robson's squad that reached the last four of the World Cup in Italy in 1990, and the Terry Venables-led side that was eliminated at the same stage of Euro '96.
He retired from playing six years after that, having enjoyed spells at Newcastle United, Manchester City, West Ham, Coventry and non-league Wealdstone as well as captaining Forest under the management of Brian Clough.

The Dow Jones Industrial Average gained 369.96 points or 2.12% finishing at 17,847.63.
The broader  S&P 500 index rose 42.07 or 2.05% to 2,091.69, while the Nasdaq index jumped 104.74 or 2.08% to 5,142.27.
The US market added 211,000 new jobs in November leaving unemployment at 5%.
Many investors now believe it is inevitable that the Federal Reserve will raise interest rates when it meets on 15 and 16 December.
Bank stocks were among the days big winners. Shares of JPMorgan Chase grew by 3.2% while Citigroup shares were up 3% and shares of Wells Fargo rose 2.7%.
Oil services companies were some of the few to fall on Friday after OPEC- a group of large oil producing countries- announced it would keep production levels unchanged.
Servicing company Weatherford International lost 4.5% and Transocean fell 3.9%
While the domestic economy showed signs of strengthening, the slowdown in the global economy weighed on America's trade deficit.
Data from the US  Commerce Department showed the gap between what America imports and what it exports rose 3.4% to $43.9 billion in October.
England football legend Stuart Pearce is set to come out of retirement aged 53 in a bid to transform the fortunes of a struggling non-league side.
[NEXT_CONCEPT]
(Close): Wall Street closed up following a strong US jobs report that showed unemployment remaining at a seven and half year low.