Germany's leading scorer with 71 goals in 137 internationals was without a club after his Lazio contract expired last season and he will now join the national side's coaching team, AFP reported.
Klose hit a record 16th goal in World Cup finals during the 7-1 semifinal thrashing of host Brazil two years ago, which saw him overtake former Brazil star Ronaldo.
Germany went on to win the title.
Klose now plans to join Germany's coaching staff after an invitation from head coach Joachim Loew.
According to a German FA (DFB) statement, Klose will complete an individual training program with the goal of embarking on a coaching career.
He will be on the Germany bench alongside Loew for the 2018 World Cup qualifier away to San Marino on November 11 and the friendly four days later against Italy in Milan.
"I celebrated my biggest successes in the national team, the time was wonderful and remains unforgettable so I am happy to be able to return to the DFB," said Klose.
"The idea has been growing in the last few months to stay on the pitch, but with a new perspective, mainly as a coach.
"To be able to read a game, to prepare myself meticulously, to develop strategies and tactics — that had already really interested me as a player.
"I am very grateful to Jogi Loew and (DFB director) Hansi Flick for this opportunity and chance to sharpen my practical skills."
Loew, who extended his contract as head coach until 2020 on Monday, said he was delighted to welcome Klose into his backroom staff.
"Miro has always been dependable so I am very happy that he is now part of our team," said the 56-year-old, who has been head coach since 2006.
"He is a role model, as a human being and an athlete, who gives his all for the team and its success.
"We want to support him in the DFB on his path for becoming a coach.
"I am certain we (the backroom staff) as well as the players will benefit greatly from his presence and participation."
Klose made his Bundesliga debut in 2000 with Kaiserslautern and went on to play for Werder Bremen, Bayern Munich and Lazio.
He scored 121 goals in 307 matches in Germany's top flight and managed 68 goals in 173 Serie A games during five years with Lazio, which he joined in 2011.
His final appearance for Germany was in the 2014 World Cup final win over Argentina after extra time at Rio de Janeiro's iconic Maracana stadium.