The former Republic of Ireland international, who played 87 times for the Hatters between 1984-89, will be looking to help the struggling Seagulls avoid relegation.
Ex-Luton Town defender John Dreyer, 49, had been named caretaker boss of League One Preston North End.
He was previously assistant to former manager Graham Westley, while Simon Grayson has been named their new boss.
Meanwhile, former assistant manager Kevin Watson is among the candidates to replace David Holdsworth as Lincoln City boss.
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Holdsworth departed Sincil Bank by mutual consent on Sunday and Watson has reportedly thrown his hat into the ring to replace him.
Watson worked under both Mick Hardford and Richard Money at Kenilworth Road and his application is reportedly a joint one with non-league coach Jody Brown tipped to be his assistant.