Hartley was suspended for 11 weeks after being shown a red card for verbally abusing referee Wayne Barnes in last season's Aviva Premiership final.
It was another stain on the 27-year-old's chequered disciplinary record, but the remorse he displayed during recent talks has convinced Lancaster that he deserves another opportunity.
"I had a long, hard think about it and had a long conversation with Dylan. I wanted to be reassured that he understands where the line is, what is right and what is wrong," Lancaster said.
"He accepts that and knows he needs a strong start to the season with Northampton as changes can be made, with Rob Webber and David Paice pushing hard."
Six new players have been selected in the 33-strong squad in lock Dave Attwood, flanker Matt Kvesic, number eight Billy Vunipola, centre Kyle Eastmond and wings Christian Wade and Marland Yarde.
All bar Vunipola have been rewarded for their outstanding form during the summer tour to Argentina, while Vunipola is included at the expense of Thomas Waldrom on account of his potential.
Calum Clarke, Tom Johnson, James Haskell, Waldrom, Jonathan Joseph and David Strettle have dropped down to the 32-man Saxons squad.
"This was the toughest EPS selection we've had to make, with fierce competition for places in every area of the squad after an excellent summer for England players at all levels," Lancaster said.
"Christian Wade and Marland Yarde brought their outstanding Aviva Premiership form to the tour.
"Kyle Eastmond showed his potential and by including him in the squad we get a chance to work with him some more as we build towards the autumn.
"Up front, David Attwood adds a physical presence to the second row and in Matt Kvesic and Billy Vunipola we have young back-row players who will challenge our more established back-row players hard."
A decision on the captaincy will be made in October, with Chris Robshaw and Tom Wood the contenders.