The Dragons Academy graduate played the first of his rugby this year for Principality Premiership side Pontypool last weekend, coming on as a second-half replacement against Neath at the Gnoll on Saturday.
Head Coach Paul Turner is delighted to see Dan back playing rugby in the region. He said: "It's great to see Dan back from what could have been a career threatening injury. He played very well for Pontypool coming on as a second-half replacement on Saturday."
Centres Rhodri Gomer Davies and Ashley Smith also return to the squad following minor injury. Turner added: "We have a 24-man squad that is relishing the challenge that faces the region on Sunday at Musgrave Park.
"While we are disappointed with the result against the Scarlets, there are plenty of positive aspects of our game and I was proud of the Dragons team last night."
"I welcome the return of players available for selection and look forward to another a huge performance this weekend.
Dragons Squad : Ashley Smith, Gareth Wyatt, Tal Selley, Richard Fussell, Rory Sidey, Rhodri Gomer Davies, Shaun Connor, James Arlidge, Wayne Evans, Rob Lewis, Hugh Gustafson, Adam Black, Tom Willis, Steve Jones, Rhys Thomas, Gethin Robinson, Adam Jones, Luke Charteris, Adam Brown, Joe Bearman, Dan Lydiate, Grant Webb, Jamie Ringer, Richard Parks.