Ferdinand, who made his debut for England 16 years ago and won the last of his 81 international caps in a friendly against Switzerland in June 2011, was snubbed for the Euro 2012 finals in what Hodgson described then as a "footballing decision".
Critics suggested that the original reason Ferdinand was omitted from the Euro 2012 squad was because of tensions with former England skipper John Terry, who was involved in a racism row with Ferdinand's brother Anton.
Terry's subsequent retirement from international football however has left England short of pedigree in the central defensive areas.
Hodgson's men are second in Group H with six matches to play and face minnows San Marino on March 22 before they take on pacesetters Montenegro on March 26.
The manager said he had decided to bring back Ferdinand following a series of outstanding performances for United who are closing in on their 20th Premier League title.
"I've been following him for quite a while now and must have seen United play four or five times in the last five weeks," Hodgson told reporters at Wembley.
"He's playing well, his team are doing extremely well and this is the moment to select him because he deserves it on current form and hopefully he can help us win the next two matches because that's the most important thing.
"He is in the squad to play and not just to make up the numbers. I know he was upset about being left out in the past so I hope he is happy about being back, but I have not spoken to him yet, I have not spoken to any of the players.
"Right now Rio is the right man and if Rio is still playing in 2014 like he is now he is going to be major candidate for the squad."
Hodgson said despite speculation about Wayne Rooney's United future, after he made a brief appearance as a substitute in the Champions League exit against Real Madrid last week, he had always enjoyed working with the striker.
"For me as England manager I have never had any cause to doubt Wayne Rooney and I am pleased to have the chance to work with him again during these upcoming games," Hodgson said of the 27-year-old, who has scored 33 goals in 79 appearances.
Tottenham Hotspur's central defender Michael Dawson was also included in the squad while there was a return for former United keeper Ben Foster after his recent decision to make himself available for his country again.
Scott Parker of Spurs is also back after missing the first half of the season due to injuries but England will be without Arsenal midfielder Jack Wilshere, who was ruled out with an ankle injury on Wednesday.
"It's a blow, no question," Hodgson said of Wilshere, man-of-the-match in last month's 2-1 friendly win over Brazil.
"It's disappointing for Jack as well. He'd enjoyed a good spell of playing regularly after a long lay-off," added Hodgson of the 21-year-old, who was sidelined for the whole of last season.
Goalkeepers: Ben Foster, Joe Hart, Fraser Forster.
Defenders: Leighton Baines, Gary Cahill, Ashley Cole, Michael Dawson, Rio Ferdinand, Glen Johnson, Chris Smalling, Kyle Walker.
Midfielders: Michael Carrick, Tom Cleverley, Steven Gerrard, Frank Lampard, Aaron Lennon, James Milner, Leon Osman, Scott Parker, Alex Oxlade-Chamberlain, Theo Walcott, Ashley Young.
Strikers: Jermain Defoe, Wayne Rooney, Daniel Sturridge, Daniel Welbeck. (Additional reporting by Martyn Herman, Editing by Tom Pilcher)
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