Steele, 56, replaces John Chavis, who left LSU to become Texas A&M's defensive coordinator late last month.
Steele first came to Alabama in 2007, serving as defensive coordinator in Nick Saban's first season with the Crimson Tide. After a year as associate head coach for Alabama in 2008, Steele took the defensive coordinator job at Clemson from 2009-12.
He returned to Alabama in 2013 as director of player personnel before coaching linebackers this season. He also has served as head coach at Baylor (1999-2002) and has held various coaching positions with Tennessee, New Mexico State, Oklahoma State, Nebraska, Florida State and the NFL's Carolina Panthers.
Chavis left LSU after the Tigers lost to Notre Dame in the Music City Bowl on Dec. 30. LSU finished the season fourth in the country in scoring defense (17.5 points allowed per game) and ninth in total defense (316.8 yards allowed per game).
- Mike Fiammetta