Steele began his managerial career when he worked at Bury as a coach. Similar roles followed at Danish side Bold Klubben F.C. and Sheffield United.
In May 1936, he was appointed Bradford Park Avenue manager. He spent six years at Park Avenue and even turned out as an emergency centre forward against Sheffield Wednesday in October 1942 scoring one goal. He resigned in 1943 to rejoin Huddersfield Town. In the club's first post-war season, Huddersfield finished just one place above the relegation positions in Division One and Steele resigned.
He was working on the family's fruit farm when Bradford City tempted him back into football in July 1948. He became the second man, after Peter O'Rourke to manage both Bradford league clubs. He won just one of his first 18 games in charge as City finished bottom of Division Three (North) in 1948–49. The following season City came 19th, before a 7th-place finish in 1950–51. Steele left in February 1952 with the club again struggling in the bottom half of the league. He returned to Huddersfield Town for a third time as a scout. His grandson, David Shaw played for Town in the 1970s. He also ran a pub in Stanningley. He died in May 1964 aged 69.