Toney has scored five goals in the Premier League this season, including a hat-trick against Leeds United in their last game earlier this month.
England are bottom of the group in the Nations League ahead of the last two fixtures, five points behind leaders Hungary.
Southgate named a larger than usual 28-man squad for the matches away to Italy in Milan on September 23rd and at home to Germany at Wembley on September 26th. England are bottom of their Nations League group ahead of the last two fixtures, five points behind leaders Hungary.
With the World Cup in Qatar looming large on the horizon, inclusion in this squad looks crucial for players on the fringes so Eric Dier's recall after a two-year absence bodes well for the Tottenham Hotspur defender.
There was also relief for Manchester United defensive duo Harry Maguire (29) and Luke Shaw (27) who have both retained Southgate's trust despite losing their starting places for their clubs.
Southgate stressed that there was still time for absentees to force their way on to the plane for Qatar.
"This is a bigger than normal squad and part of the rationale is that we are very close to a World Cup and we feel, although our results were disappointing in the summer, we have picked on the basis of form and capability over a long period," Southgate said on the FA's website.
"There were certain players we wanted to keep involved this time, but that said it doesn't mean that this is the end for some of the others who aren't involved.
"Marcus Rashford, for example, has shown some encouraging signs recently. He is a player we know well so if he can perform at a high level in the next few weeks, he of course will be under consideration."
Toney's rapid rise has been perfectly timed and he now looks like the ideal back-up to skipper Harry Kane.
"We have been tracking him for a long time. I had a good chat with (Brentford manager) Thomas Frank about him last season," Southgate said.
"His form and his qualities - not only his goalscoring but his technical ability, build-up play and aerial prowess - gives us a different threat to some of the other players we could pick."
ENGLAND SQUAD
Goalkeepers: Dean Henderson, Nick Pope, Aaron Ramsdale
Defenders: Trent Alexander-Arnold, Ben Chilwell, Conor Coady, Eric Dier, Marc Guehi, Reece James, Harry Maguire, Luke Shaw, John Stones, Fikayo Tomori, Kieran Trippier, Kyle Walker
Midfielders: Jude Bellingham, Mason Mount, Kalvin Phillips, Declan Rice, James Ward-Prowse
Forwards: Tammy Abraham, Jarrod Bowen, Phil Foden, Jack Grealish, Harry Kane, Bukayo Saka, Raheem Sterling, Ivan Toney.
