Johnstone and Watkins will both link up with the Three Lions for fixtures with San Marino, Albania and Poland, with the side meeting up next week to prepare for the trio of games.
They join Wolves skipper Conor Coady, and Villa defender Tyrone Mings in the 26-man squad, although there is no place for Jack Grealish, as he continues to battle back from injury.
It is the first international call-up of any kind for Villa striker Watkins, whilst Johnstone makes the step up to senior level having previously played in numerous age groups.
Johnstone has been Albion's stand-out performer this season, and has impressed despite the side's struggles in the top flight - notching five clean sheets in 28 appearances.
His hopes of a call-up were boosted earlier this week following news of England regular Jordan Pickford being ruled out for the international break through injury.
"We obviously have an injury to Jordan, which has created a space within the squad," said Gareth Southgate on Johnstone's selection.
"I think Karl Darlow has had a very good season at Newcastle and has probably found himself out of the team at just the wrong time, really, in many regards.
"But Sam Johnstone, in a team that has had a very difficult season, has kept a very good level of performance.
"He's comfortable in possession as well as keeping the ball out of his net, which is important for us.
"He is somebody we worked with briefly for the (England) Under-21s, so we know a little bit about him.
"His recent performances in particular have been very good. It's a great opportunity for him."
Watkins meanwhile, has managed 12 goals and three assists since joining Villa, including a stunning hat-trick in his side's stunning 7-2 victory over Liverpool earlier this season.
Southgate said that it was a tight call for him to decide between the Villa striker and Leeds counterpart Patrick Bamford, but ultimately decided on Watkins due to his work off the ball.
"Both Ollie and Patrick, their goal records have been good." he said.
"We like the personalities of both. Ollie is a player we've had less interaction with in the past.
"It's going to be good to get to know him. We like his pressing, the speed and the runs in behind.
"He's got improvements to make still but for his first season in the Premier League at a big club, he's done exceptionally well."
There is no room for Villa centre-back Ezri Konsa in the squad, despite being tipped to challenge for a spot having also impressed over the campaign alongside Mings for Villa. Albion loanee Ainsley Maitland-Niles has also been omitted.
Elsewhere, the Baggies have also seen Dara O'Shea and Callum Robinson called up for the Republic of Ireland, with on-loan Villa midfielder Conor Hourihane also included, having impressed at Swansea City.
Villa winger Trezeguet has also been called up for Egypt's Africa Cup of Nations qualifiers - alongside Liverpool star Mohamed Salah and Arsenal midfielder Mohamed Elneny.
Full England squad:
Goalkeepers: Dean Henderson (Manchester United), Sam Johnstone (West Bromwich Albion), Nick Pope (Burnley)
Defenders: Ben Chilwell (Chelsea), Conor Coady (Wolverhampton Wanderers), Eric Dier (Tottenham Hotspur), Reece James (Chelsea), Harry Maguire (Manchester United), Tyrone Mings (Aston Villa), Luke Shaw (Manchester United), John Stones (Manchester City), Kieran Trippier (Atletico Madrid), Kyle Walker (Manchester City)
Midfielders: Jude Bellingham (Borussia Dortmund), Phil Foden (Manchester City), Jesse Lingard (West Ham United, loan from Manchester United), Mason Mount (Chelsea), Kalvin Phillips (Leeds United), Declan Rice (West Ham United), James Ward-Prowse (Southampton)
Forwards: Dominic Calvert-Lewin (Everton), Harry Kane (Tottenham Hotspur), Marcus Rashford (Manchester United), Bukayo Saka (Arsenal), Raheem Sterling (Manchester City), Ollie Watkins (Aston Villa)