The Manchester United youngster is one of eight changes to the team that edged to a 2-1 victory over Turkey last weekend.
Hodgson was expected to tinker with his team as he prepares to name his final 23-man squad for Euro 2016 by 11pm on Tuesday, but a notable absentee tonight is Daniel Sturridge, who is in danger of missing the tournament because of a calf injury.
In goal, Fraser Forster replaces Joe Hart, while Nathaniel Clyne, Ryan Bertrand and Chris Smalling, who will wear the captain's armband, come into the defence, taking over from Kyle Walker, Danny Rose and Gary Cahill.
In midfield, Jordan Henderson and Danny Drinkwater enter the fray, while Adam Lallana has come into the attack, with Rashford up front, meaning that Eric Dier, Dele Alli, Harry Kane and Jamie Vardy all miss out.
England: Forster; Clyne, Smalling, Stones, Bertrand; Henderson, Wilshere, Drinkwater; Lallana, Sterling, Rashford
Subs: Walker, Heaton, Milner, Dier, Townsend, Kane, Rooney, Alli, Rose, Barkley, Hart
Australia: Ryan; Smith, Milligan, Wright, Risdon; Luongo, Jedinak, Mooy; Maclaren, Rogic, Kruse
Subs: Behich, Inman, Malik, Juric, Ikonomidis, Birighitti, McKay, Federici, Goodwin, Degenek, Wilkinson, Irvine
Follow Sports Mole's live text commentary of the match here.