James, who has seven goals in 27 appearances for England, had been in a race against time to recover before the team kick off the defence of their title versus France on July 5th.
The 23-year-old has not featured since she was injured in England's game against Belgium on April 4th.
"I know this is an exciting day for the players and also for our fans and it underlines that the tournament is coming soon," England manager Sarina Wiegman said.
"Telling the players they have made the squad is always a great moment. They will all give everything to help us make the country proud.
"This group is a very well-balanced mix of players with multiple tournaments on their CVs and also those that will make their tournament debuts. I am excited to see what we are capable of this summer."
Wiegman's squad suffered a blow on Wednesday when defender Millie Bright withdrew from consideration for the tournament, saying she was not physically and mentally at her best.
Bright's withdrawal comes after goalkeeper Mary Earps and midfielder Fran Kirby announced their international retirement.
Earps appeared to have lost her starting spot to Hannah Hampton and Kirby was told she would not be in the squad for the finals in Switzerland.
The squad includes 13 players who lifted the trophy in 2022, while seven players - Michelle Agyemang, Aggie Beever-Jones, Grace Clinton, Khiara Keating, Maya Le Tissier, Anna Moorhouse and Jess Park - will be appearing in their first major tournament.
All players selected, apart from James, were part of England's recent Nations League matches against Portugal and Spain.
England Squad
Goalkeepers: Hannah Hampton, Khiara Keating, Anna Moorhouse
Defenders: Lucy Bronze, Lotte Wubben-Moy, Jess Carter, Niamh Charles, Alex Greenwood, Maya Le Tissier, Esme Morgan, Leah Williamson
Midfielders: Grace Clinton, Jess Park, Ella Toone, Georgia Stanway, Keira Walsh
Forwards: Michelle Agyemang, Aggie Beever-Jones, Lauren Hemp, Lauren James, Chloe Kelly, Beth Mead, Alessia Russo