Jesse Lingard, Ollie Watkins and James Ward-Prowse are among the seven players to be cut from Southgate's original 33-man provisional squad, which was announced last week.
The uncapped trio of Aaron Ramsdale, Ben White and Ben Godfrey have also missed the cut, while Mason Greenwood has withdrawn in order to recover from a pre-existing injury.
Alexander-Arnold was overlooked by England for March's World Cup qualifiers but a return to form during the final weeks of the Premier League season has forced Southgate to reconsider.
The Liverpool right-back will compete with Kyle Walker, Kieran Trippier and Reece James to be England's first choice in the position, though Southgate has talked up the possibility of all four players filling different roles.
Harry Maguire and Jordan Henderson are both included in the final 26-man selection despite ongoing fitness concerns. Jude Bellingham, the 17-year-old Dortmund midfielder, is also included.
England will play two pre-tournament friendlies against Austria and Romania at Middlesbrough’s Riverside Stadium this week.
Southgate’s side then face Croatia, Scotland and the Czech Republic in Group D, with all three games to be played at Wembley.
Goalkeepers: Dean Henderson, Jordan Pickford, Sam Johnstone.
Defenders: Trent Alexander-Arnold, Ben Chilwell, Conor Coady, Reece James, Harry Maguire, Tyrone Mings, Luke Shaw, John Stones, Kieran Trippier, Kyle Walker.
Midfielders: Jude Bellingham, Jordan Henderson, Mason Mount, Kalvin Phillips, Declan Rice.
Forwards: Dominic Calvert-Lewin, Phil Foden, Jack Grealish, Harry Kane, Marcus Rashford, Bukayo Saka, Raheem Sterling, Jadon Sancho.
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