England are grouped with United States, Wales and Iran for the upcoming event in Qatar, with their opener against Iran on November 21.
Brentford striker Toney along with Italy-based pair Fikayo Tomori and Tammy Abraham were all left out.
Kyle Walker has been named despite a groin injury, while Kalvin Phillips is included despite only returning from a shoulder injury in midweek for Manchester City.
Reece James is left out due to injury, along with club teammate Ben Chilwell who last week hurt his hamstring.
“Kalvin played last night so I think with him, he is free of injury,” Southgate told reporters. “We are aware that he’s not going to be able to play seven 90 minutes. That won’t be possible.
“We are going to have to build his fitness level, but he is available, free of injury and we don’t really have a lot of cover for that role in the country. Kalvin is a super player, and we feel that is a risk worth taking.
“Kyle’s a little bit different because he’s not back in full training yet, but he’s going to be available before the end of the group stage. Of course, we had to make a really difficult call with Reece James, who we think is a fantastic player, but he wasn’t going to be available, if everything went perfectly, until the latter stages of the tournament.
“There were too many unknowns for us on that road to recovery and also, I don’t think we can take a player who is unavailable for the group stages. That would be deemed arrogant in some circles It was a tough call, but Kyle is a long way ahead of that. He’s progressing really well.”
Leicester City midfielder Maddison’s selection was a major talking point, given his creative influence and Southgate explained his inclusion.
“He is playing really well,” Southgate told reporters. “We think he can give us something slightly different to the attacking players that we’ve got.
“He’s playing as good as any of the attacking players in this country. He is a little bit different to the others. I think we could need that.”