Engineer feels Dhoni's experience and coolness will be a great inspiration for the Virat Kohli-led side.
Dhoni was the captain when India won their only T20 World Cup title in 2007. He had also led the national side to the 2014 T20 World Cup final and the 2016 T20 World Cup semi-final.
"I am delighted MS Dhoni has been appointed as a mentor. Now, what does that mean, mentor, like a coach? Ravi Shastri is the coach and Dhoni is the mentor.
"Bit nice to have Dhoni alongside the team because of his experience and coolness and all that will certainly be a great inspiration for the team. I am delighted BCCI have taken that decision," Engineer said in an interview to Sports Tak.
Engineer expects Dhoni to be a very good mentor for the Indian team in the showpiece tournament.
"Mentor's role, Dhoni, I think he is not the type to interfere with anybody. He is a cool customer. If he sees something is wrong or could be done better, I am sure he will suggest in a very clever way to Ravi or Virat. In all, I think we got a very good squad, a very good mentor, manager, and captain. So, I can't see any team beating India in the T20 World Cup. I think India should win."
According to Farokh Engineer, it lovely to have former players as mentors and he also cited the example of Sachin Tendulkar's association with Mumbai Indians in the IPL.
"IPL has mentors. Every team has. What does a mentor do? It is an honorary thing, a thing of respect. Sachin Tendulkar is a mentor for Mumbai Indians. It's a lovely thing to have figureheads like Sachin and Dhoni around."
"In our time, once you give up the game, people used to forget us. But if you played the game well or were an attractive cricketer, fans will always remember and talk of you. But the officials will easily forget you. I am glad that the present officials have rectified that. Sourav Ganguly, Jay Shah, and others have done a fantastic thing by bringing in ex-players like Dhoni. I am very, very happy with that. I hope it continues. Who knows, I will be a mentor one day if I am still alive long enough."
Engineer, 83, concluded by saying that Dhoni's presence in the dressing room will have a positive effect on the India team.
"Dhoni has always had the Midas touch. Whatever he has touched has become gold. He's got a lovely wife in Sakshi. I would hope Dhoni brings that extra luck to us as well. Certainly, his knowledge will be immensely useful. He's a T20 World Cup-winning captain, after all. His very presence in the dressing room will have a great effect on the team."
(With IANS inputs)