The youngster is now leading the charts for the number of assists (five) this season across Europe's top five leagues, managing to provide a goal for a teammate for every 25 minutes of action.
Leicester midfielder James Maddison has also been added to the senior squad for the first time, while Ross Barkley has earned a recall.
Since his move from Norwich City for £20 million, the 21-year-old has been in fine form for the Foxes, having bagged three goals and two assists for the side so far.
His inclusion nonetheless raises eyebrows but Southgate feels his place and that of Derby County midfielder Mason Mount is well-deserved and with a number of key players absent through injury it gives both an opportunity to stake a claim.
Mount, now on loan from Chelsea at Derby, is another to have experienced football overseas, with the 19-year-old having spent last season at Dutch side Vitesse Arnhem. There are also call-ups for Watford's Nathaniel Chalobah and Tottenham's Harry Winks. These calls however are likely to be resisted by Southgate for now, in favour of letting Sancho improve with Aidy Boothroyd's Under-21 side first.
"We've got a few injuries in the midfield in particular - Dele (Alli), Jesse (Lingard) and Ruben (Loftus-Cheek) have been missing - and Fabian Delph, so there is an opportunity there.
He's dealing with that and excelling", the England manager said.More news: Final tweaks in North American trade deal keep lid on e-commerce
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Mount has been directly involved in 17 goals in his past 18 league appearances across the Dutch Eredivisie and the Championship, including play-off games (10 goals and seven assists).
"Well, he's had a long period injured at Chelsea a year ago, so that wasn't a reflection on the quality of the player that he hadn't been with us, but he wasn't getting any football, really", Southgate said.
Mason's situation is slightly different.
It's a big call, but it aligns to what we've done in the last 18 months.
"To have a player starting in the Champions League is of importance to us", Southgate said. We think there are some exciting young players that we've been tracking, either through their clubs or our junior teams ...
In the 25-man squad, 23 were born in the 1990s.
Only nine have scored for England.