Peel's son Tom Ravenscroft is behind plans to release a cover version of the Buzzcocks' "Ever Fallen In Love".
It is almost a year since Peel died at the age of 65, while on a working holiday in Peru with his wife, Sheila.
Pete Shelley of the Buzzcocks, who wrote the original song, will also appear on the record, alongside New Order's Peter Hook, Dave Gilmour of Pink Floyd and Jeff Beck. Newer bands including the Datsuns, the Futureheads and El Presidente also feature.
Proceeds from the single will go to Amnesty International, the human rights charity, which Peel supported.
Daltrey, said: "John Peel was willing to give his time to find new music and to go out on a limb for it. He did a lot for bands, a lot of favours, including us. He used to come to gigs and stand on the side of the stage. In those early days we had to fight for a play on the radio. He was good to us and he was good for music."
Ravenscroft, who selected the musicians who appear on the charity record, came up with the idea while making a documentary for Channel 4. The show, John Peel's Record Box, revolves around a small wooden box in which the DJ kept 140 of his favourite singles, including "Ever Fallen In Love". Ravenscroft said: "We have tried to make the single a bit like one of dad's shows, in that it's a mixture of different artists and styles.
"All the artists on the record have at some time been played by dad, whether recently, or before I was born, and in some cases before they were really popular. It's unpredictable and there's hopefully someone or something in it for every listener. I was astonished and touched that everyone agreed to be a part of it and I'm sure that the project as a whole and the work that has been put into it would have meant a huge amount to him."
Shelley described the new version of his song as "very eclectic". He added: "That was the magic of John, though. He was somebody who embraced all forms of music over the last 40 years."
Hook said: "He enriched my life through championing my group and he enriched my life through his fantastic radio programme and even now, after his death, he enriches my life because I get to make a record with people who were my heroes."
The record will be released on 21 November, to coincide with Peel's induction into Channel 4's UK Music Hall of Fame.
Radio 4 is dedicating a special edition of Home Truths to Peel next month, including an interview with his wife. The station is also serialising Peel's unfinished autobiography, Margrave of the Marshes.