Burundi-born Berahino, 21, has already been capped by England at every age level from under-16 to under-21 and has been awarded a first senior call-up after scoring seven goals in 10 Premier League games this season.
“He’s played so well, not only for West Brom, but also for the under-21s,” Hodgson told a press conference at Wembley Stadium.
“He’s been in such good form. There was no reason to pass over his credentials.
“I’m sure Saido will come wanting to play, but he faces stiff competition and he understands that. He’s not just there for the learning process, but he hasn’t made it to Wayne Rooney status.”
England will seek to continue their perfect start to 2016 European Championship qualifying when they host Slovenia on November 15, before tackling old rivals Scotland in a Glasgow friendly three days later.
Arsenal winger Walcott returns following a long spell on the sidelines with a serious knee injury, while there were also recalls for Stewart Downing of West Ham United, Everton’s Ross Barkley and Manchester United’s Michael Carrick.
Downing last played for England in Hodgson’s first game in charge against Norway in May 2012, but he has impressed for West Ham this season at the tip of a midfield diamond.
“He’s had a tremendous resurgence of form,” Hodgson said of the former Liverpool winger. “I think it was the right time to ask him to come back.”
Hodgson omitted Liverpool striker Daniel Sturridge, who has not played since suffering a thigh muscle on England duty in September.
Captain Wayne Rooney stands to win his 100th cap against Slovenia at Wembley, which will make him only the ninth England player to reach the milestone.
England squad for Euro 2016 qualifier at home to Slovenia on November 15 and friendly away to Scotland on November 18:
Goalkeepers: Fraser Forster (Southampton), Ben Foster (West Bromwich Albion), Joe Hart (Manchester City)
Defenders: Leighton Baines (Everton), Gary Cahill (Chelsea), Calum Chambers (Arsenal), Nathaniel Clyne (Southampton), Kieran Gibbs (Arsenal), Phil Jagielka (Everton), Luke Shaw, Chris Smalling (both Manchester United)
Midfielders: Ross Barkley (Everton), Michael Carrick (Manchester United), Stewart Downing (West Ham United), Jordan Henderson, Adam Lallana (both Liverpool), James Milner (Manchester City), Alex Oxlade-Chamberlain (Arsenal), Raheem Sterling (Liverpool), Andros Townsend (Tottenham Hotspur), Jack Wilshere, Theo Walcott (both Arsenal)
Forwards: Rickie Lambert (Liverpool), Wayne Rooney (capt, Manchester United), Danny Welbeck (Arsenal), Saido Berahino (West Bromwich Albion)