He has scored 13 goals since the move and been a key factor in Southampton's surprise start to this season, which has left Mauricio Pochettino's team sixth in the Premier League.
Midfielder Lallana, 25, has not been in the England squad since his only call-up in September 2012, although he did not feature in 1-1 draw with Ukraine.
Hodgson added: "Adam was with us once a long time ago. We saw him in training, we have been following him closely and he played a major part in [Southampton's] rise to the top. It was quite obvious we would pick him."
Rickie Lambert is a third Southampton player to be named by the England manager.
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