Much anticipation surrounded the potential promotion of teenagers Sancho and Mount following their fine starts to the season at Borussia Dortmund and Derby County respectively.
Reports suggested he would be handed his first U21 call but an impressive performance and an assist against Monaco on Wednesday changed Southgate's mind.
Southgate, who ultimately saw England beaten 2-1 by Croatia in their first World Cup semi-final since 1990, said he was fortunate to have a great back-up team - his assistant Steve Holland was also awarded a new contract, and the players performing on the pitch.
He has three goals and two assists for Leicester since a £20m summer move from Norwich.
The Chelsea midfielder, now on loan at Derby County, is the first Championship player named in an England squad since Wilfried Zaha in 2012.
Harry Winks, capped once, has returned to the senior team the day after starting for Tottenham against Barcelona in the Champions League, while uncapped Watford midfielder Nathaniel Chalobah is back in the squad after recovering from a long-term knee injury.
Dele Alli, Fabian Delph, Jesse Lingard and Adam Lallana all miss the two Nations League fixtures through injury.
"[Sancho and Mount] are both in their formative stages but we think they can play in the group".
"You never know with young players what they are capable of until they have an opportunity", the manager told a news conference at the national St George's Park training center.
Gareth Southgate has verbally agreed a new contract which will see him remain as England manager until after the 2022 World Cup, Sky Sports News has learned. Mount has created more chances than any other player in the League Championship and scored for England's under-21 team last month.
"Jadon's is an unusual story for a young English player". He has been fearless enough to go and play overseas and has started two Champions League games for Dortmund and has also had a big impact from the bench in their league games.
"Mason's is a slightly different situation".
The first player born since the turn of the millennium to be called up by the England senior team, the 18-year-old is reaping the rewards of last year's bold switch from Manchester City to Borussia Dortmund in search of regular football.
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