Halfpenny has not played an international since suffering knee ligament damage before last year's World Cup.
"It's great to be able to welcome back experienced players such as Dan Lydiate, Alex Cuthbert and Leigh Halfpenny, who have missed out recently with injury and that experience will be important this autumn," Howley said.
Faletau is one of three wild card picks under Wales's senior selection policy, with George North and Jamie Roberts the other two.
Neither Scarlets flyhalf Rhys Priestland or his front row club mate Rob Evans have made the cut, although props Rhys Gill and Scott Andrews both return to the side.
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Faletau injured a knee in his club debut for Bath in September and is not expected back in training until mid-November, but Howley said his experience would still be of value to the squad.
"Taulupe is still in his rehab process and has been working closely with Bath," said Howley, who is taking charge while Warren Gatland is away on British and Irish Lions duty. "We hope he will be available in the later part of the campaign."
Wales kick off against Australia on Nov. 5, before facing Argentina, Japan and South Africa.
Squad:
Forwards: Scott Andrews, Tomas Francis, Rhys Gill, Gethin Jenkins, Samson Lee, Nicky Smith, Scott Baldwin, Kristian Dacey, Ken Owens, Jake Ball, Luke Charteris, Bradley Davies, Alun Wyn Jones, Rory Thornton, Dan Baker, Taulupe Faletau, James King, Dan Lydiate, Ross Moriarty, Justin Tipuric, Sam Warburton (capt)
Backs: Gareth Davies, Rhys Webb, Lloyd Williams, Gareth Anscombe, Dan Biggar, Sam Davies, Jonathan Davies, Tyler Morgan, Jamie Roberts, Scott Williams, Hallam Amos, Alex Cuthbert, Leigh Halfpenny, George North, Liam Williams
(Reporting by Simon Jennings in Bengaluru, editing by Mitch Phillips)
