Horwill, who led the Wallabies to glory in 2011, returns to the role after missing the entire Test season due to a hamstring injury last year.
Coach Robbie Deans confirmed the news while also naming Hugh McMeniman, Kurtly Beale, Digby Ioane, Pat McCabe, Peter Kimlin and the uncapped Scott Sio as the final six additions to his squad.
The six have joined up with the team's training camp on the Sunshine Coast, where Luke Burgess and James Hanson have been retained as training cover.
The 21-year-old Brumbies prop Sio, son of Manu Samao front-row Tevita Sio, is one of four uncapped players in the squad.
"Scott has had a remarkable year," Deans said.
"While he is still developing his game, his work rate around the field, impact in contact and in defence, and the raw power he brings to his set piece indicated to us that he was ready to get under way."
Beale has been included despite continuing counselling for alcohol-related issues, with Deans confident it will not prove a distraction for the player or the team.
"We know what Kurtley is capable of in this arena," Deans said.
"He showed that as recently as last year's Spring Tour when he performed outstandingly and led the team from fly-half in adverse circumstances against many of the opposition players we now face again.
"His work last week during the first camp supported our contention that it was not too soon for him to get started again, from either a physical or a mental stand point. His physical state is a testament, both to how hard he has worked, but also his desire to get started again."
The first Test against the Lions is in Brisbane on June 22.
Squad: Ben Alexander (Brumbies), Adam Ashley-Cooper (NSW Waratahs), Berrick Barnes (NSW Waratahs), Kurtley Beale (Melbourne Rebels), Nick Cummins (Western Force), Dave Dennis (NSW Waratahs), Kane Douglas (NSW Waratahs), Saia Fainga'a (Queensland Reds), Israel Folau (NSW Waratahs), Will Genia (Queensland Reds), Liam Gill (Queensland Reds), Michael Hooper (NSW Waratahs), Rob Horne (NSW Waratahs), James Horwill (Queensland Reds), Digby Ioane (Queensland Reds), Sekope Kepu (NSW Waratahs), Peter Kimlin (Brumbies), Christian Leali'ifano (Brumbies), Pat McCabe (Brumbies), Ben McCalman (Western Force), Hugh McMeniman (Western Force), Stephen Moore (Brumbies), Ben Mowen (Brumbies), James O'Connor (Melbourne Rebels), Wycliff Palu (NSW Waratahs), Nick Phipps (Melbourne Rebels), Benn Robinson (NSW Waratahs), Rob Simmons (Queensland Reds), Scott Sio (Brumbies), James Slipper (Queensland Reds), Joe Tomane (Brumbies).