Jack Wilshere, having returned from injury at the weekend for his first full appearance in 11 months, is also included, as is recently-relegated Andros Townsend - the only man who will be playing second division football next season in the squad, following Tom Heaton's promotion with Burnley.
Going forward, the manager is spoilt for choice when it comes to his starting XI, with the striking quartet of Harry Kane, Wayne Rooney, Jamie Vardy and Daniel Sturridge sure to be England's biggest threat in France.
The 26 players named will face Turkey, Australia and Portugal in the nation's three pre-tournament friendlies, which will take place on May 22, May 27 and June 2 respectively. The squad will then be cut to 23 for the summer's big event.
Rashford is of course the big surprise, though it is expected that he will just be included for the friendlies and not actually make the Euros. The Manchester United striker is still just 18-years-old and, with no previous international experience, taking him to France would be an almighty gamble.
Wilshere too is something of a surprise given that he has been injured for the entire season - bar Arsenal's final two games - but it is no secret that Hodgson is a huge fan of the midfielder.
Jordan Henderson is also in the team, meaning that Hodgson expects him to be in good shape for the Euros despite spending the past few weeks injured on the sidelines. He returned to action for Liverpool from the bench yesterday.
Inevitably, the squad doesn't please everyone.
In the North-East, there is a lot of frustration at Jermain Defoe being overlooked, despite scoring 15 goals for a Sunderland side who survived relegation by the skin of their teeth.
There are happy fans in the North-East with Townsend called up, though East London has a few problems with that after Michail Antonio's fine season for West Ham United.
Aaron Cresswell is another English Hammer who was in with a shout of heading out on the plane to France, but also misses out.
Meanwhile, stalwarts Theo Walcott and Phil Jagielka will not be part of the summer's big event after enduring poor seasons between them. Jagielka's Everton teammate John Stones, however, gets the nod, despite recent criticisms.
Hodgson pleased with his selection
Speaking to the press as he announced his team, Hodgson spoke about his chosen players revealed that he wants to tell them who the 23 heading to France are after the second friendly with Australia.
"Everyone enjoys saying 'this is what I would have done,' but we've done a lot of work to analyse the players in the squad," he said.
One of the big talking points is the selection of few defenders - seven in total - but he is happy that this gives him "an extra player in the midfielders and forwards." Eric Dier, who usually operates in midfield, is someone Hodgson can look to to fill in in defence if required too, such is his versatility.
Other topical matters include the naming of Rashford amongst the team, and the manager admitted that the competition for him to get to France "is quite strong," but he didn't write the teenager off, saying, "he's had an outstanding end to the season."
Meanwhile, he has full belief that Henderson will be in good shape for the finals, saying that he "didn't want to name people in a preparation squad who were unfit."
Hodgson added that he was "pleased," therefore, to see the midfielder feature for Liverpool off the bench yesterday.
Squad in full:
Goalkeepers: Joe Hart, Fraser Forster, Tom Heaton.
Defenders: Nathaniel Clyne, Kyle Walker, Gary Cahill, Chris Smalling, John Stones, Ryan Bertrand, Danny Rose.
Midfielders: Dele Alli, Ross Barkley, Fabian Delph, Eric Dier, Danny Drinkwater, Jordan Henderson, Adam Lallana, James Milner, Raheem Sterling, Andros Townsend, Jack Wilshere.
Strikers: Harry Kane, Marcus Rashford, Wayne Rooney, Daniel Sturridge, Jamie Vardy.