The 30-year-old defender Mings, who has 17 England caps to his name, has enjoyed a successful campaign at Villa Park and has done enough to return to Southgate's squad for June's Euro 2024 qualifiers.
However, Watkins, who has netted 15 times this season in all competitions, hasn't been included for the fixtures against Malta and North Macedonia next month.
Former West Brom keeper Sam Johnstone and Stourbridge's Jude Bellingham, have also been named in the the 25-man squad.
Elsewhere, Crystal Palace's Eberechi Eze received his first call-up and Lewis Dunk returned four-and-a-half years after his only cap
Tottenham's Eric Dier and Chelsea's Raheem Sterling the high-profile absentees and Crystal Palace attacking midfielder Eze the only uncapped player in the group.
Former Wolves midfielder Morgan Gibbs-White had been tipped for a first call-up - but wasn't named in Southgate's squad.
Following the squad announcement, the England boss said he believes he has picked the strongest squad he can.
He said: "It (the short time between the season's end and the qualifiers) hasn't influenced selections at all. It is a difficult season for clubs, the players and us.
"We are always mindful of the welfare of the players and we have to allow players time to recuperate but not to de-condition physically.
"Like every other country we have important qualification matches on our way to Germany.
"We have picked a strong squad and the players always enjoy coming here. I think we will manage it as well as we can."
Goalkeepers: Sam Johnstone, Jordan Pickford, Aaron Ramsdale
Defenders: Trent Alexander-Arnold, Lewis Dunk, Marc Guehi, Harry Maguire, Tyrone Mings, Luke Shaw, John Stones, Kieran Trippier, Kyle Walker
Midfielders: Jude Bellingham, Eberechi Eze, Conor Gallagher, Jordan Henderson, James Maddison, Kalvin Phillips, Declan Rice
Forwards: Phil Foden, Jack Grealish, Harry Kane, Marcus Rashford, Bukayo Saka, Callum Wilson