Sancho, a gifted wide midfielder who is 17, joined Dortmund from Manchester City a year ago and has broken through this season, scoring one goal and providing seven assists in nine games mostly off the bench.
It's a big call, but it aligns to what we've done in the last 18 months.
"We've got a few injuries in the midfield in particular - Dele (Alli), Jesse (Lingard) and Ruben (Loftus-Cheek) have been missing - and Fabian Delph, so there is an opportunity there".
"We think there are some exciting young players we have been tracking, and it's a great opportunity for us to look at them".
He has three goals and two assists for Leicester since a £20m summer move from Norwich.
"He's dealing with that and excelling", the England manager said.
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"But we think they are performing well with their clubs, they're confident players".
"He's been fearless enough to go overseas and play", Southgate said.
Maddison has created more goalscoring chances than any other English player in the Premier League this season.
His inclusion nonetheless raises eyebrows but Southgate feels his place and that of Derby County midfielder Mason Mount is well-deserved and with a number of key players absent through injury it gives both an opportunity to stake a claim.
The winger's promotion to the senior setup comes after a sparkling beginning to the new season for Dortmund that has included two Champions League starts.
A total of three Liverpool players have been picked - Trent Alexander-Arnold, Joe Gomez and Jordan Henderson - while Tottenham have a total of five players in the squad; Danny Rose, Kieran Trippier, Eric Dier, Harry Winks and Harry Kane.
Tottenham midfielder Harry Winks, whose only cap came against Lithuania in October 2017, returns to the squad.