The Demons have also recalled rookie Tom Couch, but have left out reigning best and fairest winner Brent Moloney, and midfielders Matthew Bate and James Magner.
Watts has missed the past five matches with an ankle injury, after hitting some fine form from rounds eight to 15.
Frawley missed last round against St Kilda after he withdrew in the lead up due to a quadriceps injury.
Football manager Josh Mahoney said Watts and Frawley were important inclusions, while Couch had earned his spot after some impressive form for Casey in the VFL.
“Jack has been close to selection for a number of weeks - however, his ankle needed more time to fully recover. He is now at the stage where he was available for selection,” he told melbournefc.com.au.
“James, after being a late withdrawal against the Saints, has been able to complete all training requirements this week, and is fit to play against the Giants on Saturday.
“Tom has been playing at a high level for a number of weeks, and he gets another opportunity to gain some AFL experience.”
Mahoney said Moloney and Bate would play against Collingwood at Victoria Park on Saturday.
“Brent hasn’t been selected for this week’s team. Both he and Matthew will play for Casey on Saturday in a bid to perform and force their way back into the team,” he said.
Round 21 Melbourne team
B: Joel Macdonald, James Sellar, Tom McDonald
HB: Jack Watts, James Frawley, Colin Garland
C: Jack Trengove, Jordie McKenzie, Jack Grimes
HF: Neville Jetta, Brad Green, Rohan Bail
F: Jeremy Howe, Jared Rivers, Sam Blease
FOLL: Jake Spencer, Colin Sylvia, Nathan Jones
I/C: Lynden Dunn, James Strauss, Luke Tapscott, Tom Couch
EMG: Jordan Gysberts, Jack Fitzpatrick, James Magner
IN: James Frawley, Tom Couch, Jack Watts
OUT: Brent Moloney, Matthew Bate, James Magner
