Cueto's recall completes a remarkable tournament for the player who has 13 tries in his 23 England appearances.
The Sale man arrived as first-choice fullback but after an unconvincing show against the United States was dropped for the South Africa game.
An injury to Jason Robinson allowed him back into his preferred wing position, against Samoa and Tonga but a hamstring strain ruled him out of the quarter-final against Australia and he did not make the semi-final against France.
Pressure on Vickery?
"I would have played in the front row if they had asked me," Cueto said, adding he felt he had a point to prove after not performing to his peak in the pool phase.
Explaining the selection, Ashton said, "Mark has played a lot of international rugby in the back three and we can expect a fair old aerial bombardment. Experience in that position is quite important."
Asked how he could approach the game with confidence in the wake of the 36-0 pool defeat by the Springboks, Ashton replied, "Because we are playing better, simple as that.
"The players are much closer together, there have been another four games since then and we've won every one, three of them where we have come from behind.
"We have moved on massively for all of those reasons."
Saturday's team includes nine players who started that match on the same Stade de France pitch a month ago as well as four survivors from the XV who started the 2003 final; fullback Jason Robinson, flyhalf Jonny Wilkinson, lock Ben Kay and prop and captain Phil Vickery.
Centre Mike Catt, 36 last month, came off the bench in 2003 and will become the oldest player to feature in a World Cup final, while his centre partner Mathew Tait is, at 21, the youngest.
England are seeking to become the first team to retain the title but Vickery, who played in every match four years ago, said the squad's experience would only take them so far.
"I know what it took last time but we didn't come this far to go out on Saturday and think about past occasions," he said.
"This team are here to make their own history."
South Africa will name their team on Thursday.
15-Jason Robinson, 14-Paul Sackey, 13-Mathew Tait, 12-Mike Catt, 11-Mark Cueto, 10-Jonny Wilkinson, 9-Andy Gomarsall, 8-Nick Easter, 7-Lewis Moody, 6-Martin Corry, 5-Ben Kay, 4-Simon Shaw, 3-Phil Vickery (captain), 2-Mark Regan, 1-Andrew Sheridan.
Replacements: 16-George Chuter, 17-Matt Stevens, 18-Lawrence Dallaglio, 19-Joe Worsley, 20-Peter Richards, 21-Toby Flood, 22-Dan Hipkiss.