Chelsea's young defender Levi Colwill (20) is also in the squad but there was no recall for his club teammate Raheem Sterling (28) despite an impressive start to the new season.
Nketiah has been a stalwart of England's under-21 squad and has started the season well for Arsenal with two goals in their opening three Premier League games.
"Two young players who are doing very well," Southgate said of Nketiah and Colwill.
"They have done well with our junior teams. Levi had time with us in the summer."
Southgate also kept faith with Manchester United defender Harry Maguire (30) despite him not featuring for his club so far this season, while Jordan Henderson (33), who joined Saudi Arabian side Al Ettifaq in July, was retained.
England have been staunch supporters of the LGBTQ community with Henderson speaking out on discrimination issues, so his move to Saudi Arabia provoked criticism.
Asked whether he was worried about a backlash from fans, Southgate appeared baffled on Thursday.
"We're picking a team for football reasons. There are lots of different club ownership models. There are a lot of different players who play in countries with different religious beliefs," Southgate told a news conference.
"I don't know why a player would receive an adverse reaction because of where he plays football. I'm a bit lost on the questioning really."
On leaving out Sterling again, Southgate said: "A lot of competition for places in that area behind the nine. Really happy to see him do well for Chelsea, but everyone has started the season well. Raheem's not particularly happy."
England's all-time leading international scorer Harry Kane will pull on the national shirt for the first time since leaving boyhood club Tottenham Hotspur to join Bayern Munich.
Southgate said he believed the move to the Bundesliga was a good one for Kane.
"He's going to be expected to be challenging for trophies. He's got a new set of supporters to win over and a new set of team mates to impress every day on the training pitch," he said.
"A fresh challenge for him I would view as a positive."
England, who are clear leaders of Group C, face Ukraine in Wroclaw, Poland, on September 9th before facing Scotland in a friendly the following week.
England Squad
Goalkeepers: Sam Johnstone, Jordan Pickford, Aaron Ramsdale
Defenders: Ben Chilwell, Levi Colwill, Lewis Dunk, Marc Guehi, Harry Maguire, Fikayo Tomori, Kieran Trippier, Kyle Walker
Midfielders: Trent Alexander-Arnold, Jude Bellingham, Conor Gallagher, Jordan Henderson, Kalvin Phillips, Declan Rice
Forwards: Eberechi Eze, Phil Foden, Jack Grealish, Harry Kane, James Maddison, Eddie Nketiah, Marcus Rashford, Bukayo Saka, Callum Wilson
