But there was no place for experienced No 8 Billy Vunipola or wings Jonny May and Jack Nowell ahead of England's Six Nations opener at home to Scotland on February 4.
Vunipola, May and Nowell were all involved in the 27-13 defeat by South Africa in November that signalled the end of Eddie Jones' tenure as England coach.
Both prop Cole, who has not played for England since their 2019 World Cup final defeat by South Africa, and utility back Daly fell out of favour under Jones but have returned under Borthwick.
Former England captain Borthwick replaced Jones last month after the Australian, now back in charge of the Wallabies for a second time, was sacked following England's worst year since 2008.
Farrell was included in the squad after the Rugby Football Union (RFU) confirmed his ban for a dangerous tackle playing for Saracens will have been deemed fully served before the Six Nations begins.
Borthwick said Farrell, who plays at fly-half or centre, would retain his position as England captain, with forwards Ellis Genge and Courtney Lawes, who returns to the squad after injury, named as vice-captains.
The former Leicester head coach said he had been told by the RFU's legal department Farrell would be available for the Scotland match despite the controversy over the terms of his suspension after he was cited for making contact with the head of Gloucester's Jack Clement.
"We want the best leaders," said Borthwick at a press conference.
Northampton's rookie fly-half Fin Smith was called up for the first time, providing cover for Farrell and Marcus Smith, while Ollie Hassell-Collins, George McGuigan, Cadan Murley and Jack Walker are the other uncapped players.
"This is an exciting squad with a blend of Six Nations experience and young talent and includes players who are in excellent form in the Premiership," Borthwick said.
"I know the players can't wait to get back to Twickenham and give our fans a performance they can be proud of. The hard work for the Scotland game starts now."
England squad
Backs
Elliot Daly (Saracens) Owen Farrell (Saracens) Tommy Freeman (Northampton) Ollie Hassell-Collins (London Irish), Dan Kelly (Leicester Tigers) Max Malins (Saracens), Joe Marchant (Harlequins), Alex Mitchell (Northampton), Cadan Murley (Harlequins), Henry Slade (Exeter), Fin Smith (Northampton), Marcus Smith (Harlequins), Freddie Steward (Leicester) Manu Tuilagi, (Sale), Jack van Poortvliet (Leicester), Ben Youngs (Leicester)
Forwards
Ollie Chessum (Leicester), Dan Cole (Leicester) Ben Curry (Sale), Alex Dombrandt (Harlequins), Ben Earl (Saracens), Ellis Genge (Bristol), Jamie George (Saracens), Joe Heyes (Leicester), Jonny Hill (Sale), Nick Isiekwe (Saracens), Maro Itoje (Saracens), Courtney Lawes (Northampton), Lewis Ludlam (Northampton), George McGuigan (Gloucester), Bevan Rodd (Sale), Sam Simmonds (Exeter), Kyle Sinckler (Bristol), Mako Vunipola (Saracens) Jack Walker (Harlequins), Jack Willis (Toulouse/FRA)
Coach: Steve Borthwick (ENG)
