Thompson had been with the Terriers for just a short time after a long stint as number two at Blackpool which included more than one spell as caretaker manager, but he opted to make the move to Elland Road when approached by his former Bolton team mate Neil Redfearn.
"It's a fantastic opportunity," the former midfielder said. "Leeds sells itself and when the manager wants you, it's a great opportunity. You want to work for a manager that wants you and at a club like Leeds. I can't wait to get started.
"I've been down to the training ground today (Thursday) and I'm really looking forward to it, there are some good players out there."
Speaking about his new boss Redfearn, he added: "We were young apprentices at Bolton, we made our debuts together. We just hit it off straight away. There was us two, Warren Joyce, Simon Woods and Stevie Saunders so there was a good group coming through."
Thompson joined Burnley on the same day as Kurt Nogan arrived from Brighton with both of them making their debut in a 4-1 defeat at Tranmere. His Burnley career faltered due to ongoing problems with Adrian Heath, who had replaced Mullen as manager, and he was released at the end of the 1996/97 season.
He made 49 league appearances for the Clarets, scoring one goal, that coming in a 2-1 win at Luton on the opening day of the 1996/97 season.