The Fool plays an important role in King Lear, particularly in telling the King the truth about his behavior.  The role of the Jester or the Fool in the King's court permits him to say anything, make any criticism without fear of retribution, such as being executed for offending the King.  So, he acts as an external conscience, speaking the truth to Lear about his actions, and those of Goneril and Regan.

The irony that is represented in the character of the Fool, is that throughout his appearance in the play, he is depicted as being wiser than the King. At one point angering the King to accuse him:

"Dost thou call me fool, boy?" to which the Fool, always wiser than he appears, replies, "All thy [your] other titles thou [you] hast [have] given away; that thou [you] wast [were] born with" (Lines 164-165). (Shakespeare)

 The Fool sees the world more clearly and with greater wisdom, recognizing the true nature of Regan and Goneril, while Lear continues to believe that his daughters will love and respect him.  The Fool knows that Cordelia is the only daughter that loves her father. 

In Act I, Scene IV, the Fool is very direct with the King.

"Fool. Dost thou know the difference, my boy,
between a bitter fool and a sweet fool?
Lear. No, lad; teach me.
Fool. That lord that counsell'd thee
To give away thy land,
Come place him here by me,
Do thou for him stand:
The sweet and bitter fool
Will presently appear;
The one in motley here,
The other found out there.
Lear. Dost thou call me fool, boy?" (Shakespeare) 

The Fool, having direct, well in riddle form, conversation with the King allows him to see the error of his ways in wrongly and harshly judging Cordelia.  In a metaphoric sense, the Fool can be perceived, symbolically, as Cordelia in disguise attempting to convince her father of the treachery of Goneril and Regan and truth of Cordelia's love. 

The Fool is a truth detector.

"When Lear begins to go mad as the result of his elder daughter's ingratitude, the Fool reminds him that he has brought his suffering upon himself by not seeing that ingratitude earlier."