He went on to work as goalkeeping coach with
Northampton Town,
Oldham Athletic, Northampton Town again, the
England under-19 team, and
Nottingham Forest, before replacing
Nigel Spink as goalkeeping coach of
Birmingham City in January 2008. While in this position, Watson built a reputation as an excellent coach, praised for enhancing the careers of England goalkeepers
Joe Hart,
Ben Foster and
Jack Butland, experience that encouraged new manager
Roy Hodgson to invite him to work alongside
Ray Clemence with the
England team at
Euro 2012. Watson remained as England's goalkeeping coach for four years, and was prepared to stay on after Hodgson and the rest of his staff left following the poor performance at
Euro 2016, but Hodgson's successor
Sam Allardyce replaced him with
Martyn Margetson. On 6 July 2012, Watson joined
Norwich City as goalkeeping coach, continuing his relationship with Chris Hughton whom he previously worked under at Birmingham City. Two years later, he joined
Southampton as senior goalkeeping coach as part of new manager
Ronald Koeman's staff. He was named head of goalkeeping in 2016, and in 2019 was appointed as a first-team assistant coach under
Ralph Hasenhüttl. ==Honours==