The former Argentina international played for City for three seasons from 2014 before joining Chelsea and spending four years at Stamford Bridge.
Caballero will start his first coaching stint after a spell of 18 months at Southampton.
"Thanks to Caballero for his service during his time with the club. The keeper has joined LCFC (Leicester) as assistant manager following the expiry of his SaintsFC contract," Southampton said in a post on Twitter.
The League Cup, FA Cup, Champions League and Europa League winner will become the fifth addition to Maresca's backroom staff after a playing career of more than two decades.
Maresca left his role as an assistant coach under Pep Guardiola at treble winners City and signed a three-year deal with Leicester. Leicester will begin their Championship campaign at home against Coventry City on August 6th.
