Amir Ohana, of Mr Netanyahu’s Likud party, was named as acting justice minister following the sacking of the previous office holder.
Mr Ohana, 43, is a Netanyahu loyalist, who backs moves to protect the prime minister from possible prosecution.
His appointment comes days after parliament dissolved itself in preparation for fresh elections.
Mr Netanyahu fired the previous justice minister, Ayelet Shaked, three days ago. Shaked’s party, which was part of Netanyahu’s coalition, did not get enough seats to return to parliament in elections in May.
Israelis will go back to the polls in September after Mr Netanyahu failed to get support from enough parties to form a new government.
Announcing his appointment, the prime minister’s office said Mr Ohana was a former lawyer who was “very familiar with the justice system”.
Mr Ohana is a strong supporter of Mr Netanyahu, and has given his backing to a controversial bill to grant a sitting prime minister immunity from prosecution.
Mr Netanyahu is under investigation for alleged bribery and fraud and could be indicted in the next few months. He has vehemently denied the accusations against him.
Mr Ohana is a gay rights activist who supports same-sex marriage, which is not recognised in Israel unless performed abroad, and last year voted against party lines in favour of a bill widening a ban on discrimination based on sexual identification.
Although gay rights face opposition from the powerful ultra-Orthodox Jewish community in Israel, the country has a progressive attitude towards the gay community which have protections under the law.
Mr Ohana is one of a number of openly gay MPs, and last year an Israeli city near Tel Aviv became the first to have an openly gay mayor.