Shelton's hiring comes slightly more than two weeks after the Rays announced that Steve Henderson would not be retained in the position.
Shelton, 39, spent the past five seasons as the Indians' hitting coach.
"Derek has proven himself to be one of the better minds in baseball when it comes to hitting," Friedman said. "He brings a fresh voice that can help our talented core of hitters reach new heights. His attention to detail and ability to communicate will be great additions to our group."
Maddon has been hoping to improve the situational hitting at the Major League level as well as throughout the organization.
"I believe he is the kind of coach who can create a hitting program that will benefit the organization both at the Minor League and Major League levels," Maddon said. "In our conversations, I found that we share the same philosophy on a number of different areas. He was very clear and concise on his intentions and in the end it was an easy decision."
Shelton went right to the heart of the problem when he cited one of the most important aspects of situational hitting was getting a runner home from third base with less than two outs.
"I think the big thing we're going to try and talk about and be consistent with about is making sure our approach stays consistent," Shelton said. "What I mean by that is it's going to be about the pitches we swing at. The pitches we don't swing at and work off that.
"I think at times guys get in the situation where they try to get hits and do too much in those situations instead of just adding on runs. So I think that's going to be the core emphasis of what we talk about right from the get-go."
Shelton was asked if it's more difficult getting younger hitters, like those in the Rays lineup, to grasp situational hitting concepts.
"I think as you gain experience in those situations, you get better at it," Shelton said. "But I think with the group of hitters we have here and the way these guys can hit here, it's going to be something we'll be able to start drilling from Day 1 of Spring Training.
"It will definitely be a focus from the first time we get in the cage and continue to work through it and get in the season and go from there. I think with the caliber of hitters we have here I think they can really do a good job with it."
Shelton was named Indians hitting coach on June 4, 2005, at the age of 34, replacing Hall of Famer Eddie Murray. He remained in that role through the end of 2009. Over his tenure the Indians ranked fifth in the Major Leagues in runs scored, seventh in batting average, third in on-base percentage, sixth in slugging percentage, second in doubles and 10th in home runs. In each of his first four seasons (2005-08), the Indians' offense ranked eighth or higher in the Majors in runs scored. In 2009 they finished 12th.
Shelton spent seven years with the Indians, also serving as hitting coordinator from 2003-05. Prior to that, he spent six seasons coaching in the Yankees organization. He began his coaching career with the Gulf Coast League Yankees in 1997 and earned promotions to Class A Tampa in 1998 and Double-A Norwich in 1999. He then managed three years for the Gulf Coast League Yankees (2000-01) and Staten Island Yankees (Short Season Class A; 2002), leading his clubs to first-place finishes in 2000 and 2001 and league championships in 2001 and 2002.
A former catcher, Shelton played two years in the Yankees' organization before an elbow injury ended his career. He graduated from Southern Illinois University with a degree in criminal justice. He resides in Tampa with his wife, Alison, and two children, Jackson and Isabella.
Shelton will be the sixth hitting coach in club history and the youngest. He follows Henderson (1998, 2006-09), Leon Roberts (1999-2000), Wade Boggs (2001), Milt May (2002) and Lee Elia (2003-05).