Joe Hart is set to start for England, while Hodgson also selected Rob Green of Championship side West Ham United and handed Norwich City goalkeeper John Ruddy a suprise call-up.
But after Ruddy broke his finger in training, 19-year-old Butland finds himself promoted to the full squad.
Speaking about his goalkeeping options, Hodgson said: "You'll understand we don't have many English goalkeepers to choose from.”
Butland, who stands at six foot four inches tall and weighs just shy of 15 stone, belongs to Championship side Birmingham City but has yet to represent the club. He spent the season on loan at League Two outfit Cheltenham Town, where he kept 11 clean sheets in 24 appearances.
“My target for the season was to gain first-team experience, with Birmingham or out on loan, so the last few months have gone way beyond anything I could have hoped for,” he told the Daily Mirror last month.
Butland has, however, been involved in the England youth set-up for some years, turning out for the U16s and up to the U21s under Stuart Pearce.
And Pearce is sufficiently impressed by Butland that he has kept the youngster on the shortlist of 80 names for a place in the GB Olympic squad, and he is tipped to make the final squad for the London Games.
Players from the lower echelons of English football have rarely been handed an opportunity at international level. Steve Bull, who represented England while at third division Wolves in the 1988-89 season, was the last player to win an England cap from outside the top two divisions.
Peter Taylor, who went on to manage England as caretaker in 2000, won four England caps while playing for third-tier Crystal Palace in the 1970s, while Coventry City’s Reg Matthews (five caps) and Tommy Lawton of Notts County (four caps) also managed the feat in the post-war era.
Butland remains an extremely long shot to make his debut at Euro 2012 but he is nearer than almost anyone could have envisaged.