Parkinson played in the two-legged final alongside Jamie Carragher and Michael Owen against a West Ham United side which featured Rio Ferdinand and Frank Lampard.
And now the 36-year-old says he will be tapping into that experience as he picks a Tranmere team to take on Barnton in the first round qualifying on Monday evening.
Barnton v Tranmere Rovers
The FA Youth Cup
First Round Qualifying
7pm, Monday 21 September 2015
Townfield, Barnton FC
By James Gray
"We were the first Liverpool team to win The FA Youth Cup," said Parkinson. "It was an unbelievable team to be part of.
"I was a first-year apprentice at the time, but playing in the same team as those guys who went on to go to such a level was awesome.
"We won at Upton Park and then came back to finish it off at Anfield. We played in front of a big crowd, more than 20,000, and the players know that if they make it through, they can play at one of the big grounds too.
"A lot of the things I learnt as a young player at Liverpool in that team are things that I take into my coaching now, and instill in the players at Tranmere.
"It’s great to be able to call on my experiences as a player, especially in the same competition, and I can really relate to the players in that sense."
Rovers will need no motivation going into the clash against Barnton, as last season they were dumped out in the third round by Mansfield on penalties.
Parkinson added: "We got really unlucky last year because we got ourselves into a winning position, but then got pegged back and lost on penalties. It was tough for the lads to take.
Parkinson won The FA Youth Cup with Liverpool in 1996
"Because the first team have been relegated, we’ve got to come in through the qualifying rounds which makes it more difficult to get back to that level.
"It’s a good group of first-year scholars that have come in who have been together for a while, so they’re a really good influence in the squad."
Parkinson’s experience goes beyond winning the FA Youth Cup, as the forward made over 150 appearances for Tranmere, including the League Cup final in 2000 and the quarter-final of The FA Cup in the same year.
So when it comes to cup football, Parkinson understands the magic of it more than most.
"The FA Youth Cup is a totally different prospect to the league, so the lads will definitely be excited for the game," said Parkinson
"It adds that little special something that comes with the Youth Cup or the senior FA Cup as well. You can’t put your finger on what it is but it’s definitely different.
"The lads know that the further down the line you get, the more likely you are to play against the bigger teams at the bigger grounds. It’s a chance to pit your wits against different players from different standards."
