Dawson, who turns 26 next month, has performed well with the England Lions side that recently played Pakistan A in the UAE and will link up later this week with the senior squad that is currently in South Africa.
“Liam Dawson has been selected after consistently strong performances for the Lions recently against Pakistan A. As a left-arm spinning all-rounder he will be a very useful addition particularly in sub-continent conditions,” selector James Whitaker said in a media release on Wednesday.
Pietersen's form in recent domestic Twenty20 tournaments in South Africa and Australia had led to calls for his return to the side, though these were quickly snuffed out by captain Eoin Morgan this week.
Fast bowler Steven Finn has been selected despite sitting out the limited overs portion of the South Africa tour with a side-strain.
It means there is no place for the number one test bowler Stuart Broad, who misses his first World Twenty20 tournament.
England have also strengthened their management team with the return of former Sri Lankan batsman Mahela Jayawardene for the first 10 days of the tournament.
Ex-England Twenty20 captain Paul Collingwood will also work alongside Trevor Bayliss, Paul Farbrace and Ottis Gibson for the duration of the event.
“Mahela and Paul proved very popular additions to the coaching team when they spent time with England in the UAE earlier this winter and I'm delighted that they are both able to help our T20 side,” England's Director of Cricket Andrew Strauss said.
“Their international experience, previous success at World T20 tournaments and, particularly in Mahela's case, knowledge of conditions make them ideal resources to tap into and I have no doubt the players will gain a huge amount from having them around the dressing room.”
England open their World Twenty20 campaign against West Indies on Mar. 16 and will also play South Africa, Sri Lanka and a first round qualifier from Group B that includes Scotland, Zimbabwe, Afghanistan and Hong Kong.
England were World Twenty20 champions in 2010 when they won the tournament staged in the West Indies.
Squad: Eoin Morgan (captain), Moeen Ali, Sam Billings, Jos Buttler, Liam Dawson, Steven Finn, Alex Hales, Chris Jordan, Adil Rashid, Joe Root, Jason Roy, Ben Stokes, Reece Topley, James Vince, David Willey. – Reuters
Original source: England names World Twenty20 squad