Seltzer, who was on Crean's staff at Marquette and came with Crean to Indiana, left IU three years ago to take a job as the head coach at Samford University.
He was let go, however, after two seasons there.
Seltzer has been seen around the program a lot this season and was at the scorer's table on Saturday for the IU game with Ohio State.
Crean said on his radio show that IU has hired Seltzer as the team's director of player performance. He said Seltzer will serve in a mentor role to the IU players.
Crean said Seltzer's position isn't a permanent one but it will give him a chance to stay involved in college basketball.
He thanked IU athletic director Fred Glass for working hard behind the scenes to get it done.