As a full-time on-field assistant coach, Krantz will serve as the special teams assistant and will coach the Nickels and the Sam linebackers.
"Kyle has been with me for the past five years and thinks like we do", said Coach Muschamp.
Krantz joined the Kentucky staff just prior to the start of the 2011 season, serving as a graduate assistant for the Wildcats.
Muschamp, the former Florida head coach and two-time former Auburn defensive coordinator, is 15-11 in two seasons with the Gamecocks.
Defensive coordinator Travaris Robinson also got a big bump, and will now be paid $1.2 million a year.
"No one knows how to handle adversity and success as a Gamecock more than Marcus Lattimore", Muschamp told ESPN.
Lattimore set the school mark with 38 rushing touchdowns from 2010-2012.
Unfortunately for Lattimore, knee injuries ended his sophomore and junior campaigns. "He could have gone anywhere in the country and made a decision to stay here. He will be a great addition to our program".
Head coach Will Muschamp was rewarded by South Carolina's administration with a new contract on Friday, granting a raise and extension to the man tasked with turning around the program. But Lattimore never got back to full strength and didn't appear in a game for San Francisco before he retired from football at the age of 23.
He is married to the former Miranda Bailey.