We apply the lattice Boltzmann method and the bead-spring network model of deformable particles (DPs) to study shear-induced particle ordering and deformation and the corresponding rheological behavior for dense DP suspensions confined in a narrow gap under steady external shear. The particle configuration is characterized with small-angle scattering intensity, the real-space 2D local order parameter, and the particle shape factors including deformation, stretching and tilt angles. We investigate how particle ordering and deformation vary with the particle volume fraction ϕ (=0.45-0.65) and the external shear rate characterized with the capillary number Ca (=0.003-0.191). The degree of particle deformation increases mildly with ϕ but significantly with Ca. Under moderate shear rate (Ca = 0.105), the inter-particle structure evolves from string-like ordering to layered hexagonal close packing (HCP) as ϕ increases. A long wavelength particle slithering motion emerges for sufficiently large ϕ. For ϕ = 0.61, the structure maintains layered HCP for Ca = 0.031-0.143 but gradually becomes disordered for larger and smaller Ca. The correlation in particle zigzag movements depends sensitively on ϕ and particle ordering. Layer-by-layer analysis reveals how the non-slippery hard walls affect particle ordering and deformation. The shear-induced reconfiguration of DPs observed in the simulation agrees qualitatively with experimental results of sheared uniform emulsions. The apparent suspension viscosity increases with ϕ but exhibits much weaker dependence compared to hard-sphere suspensions, indicating that particle deformation and unjamming under shear can significantly reduce the viscous stress. Furthermore, the suspension shear-thins, corresponding to increased inter-DP ordering and particle deformation with Ca. This work provides useful insights into the microstructure-rheology relationship of concentrated deformable particle suspensions.