It comes as star recruit Leo Thompson prepares for his Canterbury debut, having recovered from his calf injury in time for Sunday's clash with Parramatta.
Speedy fullback Dufty holds a NSW Cup contract with Souths so needed an exemption to face the Dragons in place of the injured Jye Gray this Saturday.
The 30-year-old's most recent NRL game came in May 2022 before he was released by Canterbury mid-season to join English side Warrington.
Dufty returned to Australia over the off-season, played two trials for Souths, and trained at fullback in Tuesday's field session before being named on Souths' team sheet at 4pm.
His return comes against the winless Dragons, who opted not to renew the local junior's contract following the 2021 season.
"It's funny how it works sometimes," said Souths halfback Jamie Humphreys.
"He was obviously a Dragons junior and probably things didn't end there the way he would've wanted.
"Probably couldn't get a closer replacement to Jye than Dufty at the moment. They're really similar in the way they play, so much energy and they'll take those tough carries and make the metres that we need."
Elsewhere, Kiwi international Thompson adds muscle to a Bulldogs forward pack that will be high on confidence following Thursday's defeat of ladder-leading Penrith.
His return from injury three weeks ahead of schedule comes at just the right time given Max King's broken jaw.
Injury-stricken Brisbane have named Josh Rogers at hooker to face Wests Tigers as Cory Paix continues to recover from a head knock.
Adam Reynolds is listed at halfback and is set to return from a groin injury to face the Tigers, whose own star playmaker Jarome Luai is back from a knee issue.
The Tigers also have centre Taylan May returning from the shoulder injury he suffered in the club's first game of the season.
Out-of-favour Izack Tago will play his first game of the year for Penrith as replacement for the suspended Casey McLean.
A personal issue ruled Tago out of round one and the backline's subsequent form meant he couldn't find a spot in the side prior to this Friday's clash with the Dolphins.
Luke Garner will start on an edge for Penrith in place of NSW representative Liam Martin, who suffered a knee injury in last week's loss to the Bulldogs.
Newcastle's marquee man Dylan Brown returns from a knee injury to face the Sydney Roosters, pushing Fletcher Sharpe to fullback and the in-form Fletcher Hunt to centre.
Canberra have dropped Savelio Tamale following a tough game in the tight win over Souths, bringing Matt Timoko into the backline.
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