It is the first match Hartley has missed since Eddie Jones took over following the 2015 World Cup and paves the way for British and Irish Lions regular Jamie George to start only his second game for England having replaced Hartley in 22 of his previous 23 appearances.
Luke Cowan-Dickie is added to the replacements as back-up hooker in the squad named by coach Jones on Thursday.
Te'o will start at outside centre to combat the power of Mathieu Bastareaud, while Elliot Daly, who has recovered more quickly than expected from an ankle injury, returns to the starting XV at left wing with Jonny May on the right.
Watson switches from the wing to fullback in place of Mike Brown, who is dropped to the bench in a move many England fans have been calling for for a long time.
Despite England's struggles in the breakdown at Murrayfield, Jones has kept the same back row of Chris Robshaw, Nathan Hughes and converted lock Courtney Lawes but he has new options on the bench in the shape of James Haskell and Sam Simmonds. Prop Kyle Sinckler is also back among the replacements.
Centre Owen Farrell will captain the side with his Saracens team mate Mako Vunipola named as vice-captain.
"After a loss we want a response from the players this week," Jones said in a statement.
"Against France we want to be brutal and aggressive on the gain line and to play with a great tactical discipline.
"We want to attack more from kick return so Anthony gets his chance at fullback. We felt that JJ (Jonathan Joseph) would play well against Scotland but felt we needed someone bigger and stronger on a slower track at the Stade de France and that's why Ben gets the starting position."
Following the loss in Scotland, the second of Eddie Jones's 26 games in charge, England's hopes of retaining the title are extremely slim, though they will be improved if Ireland fail to beat the Scots in Dublin in the earlier game on Saturday.
France ended their terrible run of results with victory over Italy last time out and will be desperate to add to that with a victory over an England team who have won six of the teams' last seven Six Nations meetings.
England team: 15 Anthony Watson, 14 Jonny May, 13 Ben Te'o, 12 Owen Farrell (captain), 11 Elliot Daly, 10 George Ford, 9 Danny Care, 8 Nathan Hughes, 7 Chris Robshaw, 6 Courtney Lawes, 5 Maro Itoje, 4 Joe Launchbury, 3 Dan Cole, 2 Jamie George, 1 Mako Vunipola.
Replacements: 16 Luke Cowan-Dickie, 17 Joe Marler, 18 Kyle Sinckler, 19 James Haskell, 20 Sam Simmonds, 21 Richard Wigglesworth, 22 Jonathan Joseph, 23 Mike Brown.
(Reporting by Mitch Phillips; Editing by John O'Brien and Sudipto Ganguly)
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