McFadden played 76 games for the Raiders from 1997-2001 and began his coaching career there in charge of their Under 20s side.
He has spent the past six seasons with the New Zealand Warriors, where he was Head Coach from mid 2014 until the end of 2016.
He will join the Raiders as a replacement for Mick Crawley, who knocked back a two-year extension after four seasons as Assistant Coach.
McFadden’s experience will be a boost to the Raiders, who finished in 10th position this season after a series of frustratingly close losses. The Raiders started 0-3 this season and lost 11 games by nine points or less, but showed great promise late in the season when they took down the Rabbitohs 24-12 in Round 24.
“Andrew is a very qualified Coach who has had experience as an NRL Head Coach in New Zealand,” Raiders CEO Don Furner told the club’s website.