Apart from Yuvraj, left-arm spinner Pragyan Ojha was also rewarded with a berth in the 15-member squad which had no place for paceman Rudra Pratap Singh.
Tamil Nadu opener Murali Vijay, who made his debut in the fourth Test against Australia in Nagpur, and his statemate S Badrinath have both been retained in the team announced by the BCCI after a meeting of the selection committee.
There were no major surprises in the team with the selectors preferring to more or less retain the same group that had done duty in the recent Test series against Australia.
The 26-year-old Yuvraj forced his way back into Test reckoning because of his sizzling form in the recent ODI series against England before it was called off following the terror attacks in Mumbai.
The Punjab batsman, who has not been able to make much of an impact on the longer version of the game so far, will get another chance to cement a place in the team, particularly after the retirement of fellow left-hander Sourav Ganguly.
Yuvraj had last played a Test against South Africa in Kanpur in April and appears to be a certainty for the first Test against England to be held in Chennai from December 11 to 15.
Yuvraj has so far played 23 Tests and has compiled 1050 runs for an average of 32.81 which does not quite justify the talent he has got.
Hyderabad spinner Ojha has been rewarded with a berth in the Test team, filling up the spot left vacant by former Test captain Anil Kumble who has also bid farewell to the game.
With the selectors opting to strengthen the spin department, paceman R P Singh had be left out of the team.
Tamil Nadu opener Murali Vijay, who made a rather impressive debut against Australia, has been retained in the squad which has eight specialist batsmen, three pacers, three spinners and one wicket-keeper batsman in captain Mahendra Singh Dhoni.
Vijay will be the reserve opener with Sehwag and Gautam Gambhir being the regular openers.
In the absence of veteran leg-spinner Anil Kumble, Harbhajan Singh will have to shoulder the spin responsibility alongwith leg spinner Amit Mishra who made quite an impact in the series against Australia.
VVS laxman, who pulled out of the Ranji Trophy tie against Mumbai because of an injury, has been included in the team which means that he has recovered from the injury.
Sachin Tendulkar and Rahul Dravid are the two most experienced batsmen in the line-up and the duo will have a big role to play in the series.
The terror attacks in Mumbai had cast a shadow of uncertainty on the Test series with the England team returning home, abandoning the last two ODIs in Guwahati and New Delhi.
But the England and Wales Cricket Board (ECB) has now given the go-ahead and a full-strength England squad will leave for Abu Dhabi where they will have their practice sessions before coming to India.
"After spending the last 72 hours consulting security advisers and Government agencies at the highest level, the England and Wales Cricket Board has determined that England will leave for Abu Dhabi to resume their two Test tour of India," the ECB said in a statement.
England are scheduled to play the first Test in Chennai from December 11-15 and the second Test in Mohali from December 19-23 after the itinerary was revised following the Mumbai carnage.
The Squad: Mahendra Singh Dhoni (capt), Virender Sehwag (vice-captain), Gautam Gambhir, Rahul Dravid, Sachin Tendulkar, VVS Laxman, Yuvraj Singh, Amit Mishra, Harbhajan Singh, Zaheer Khan, Ishant Sharma, S Badrinath, Munaf Patel, Murali Vijay, Pragyan Ojha.