The winger has scored four goals and registered four assists in his last six appearances for Real Madrid, while Aaron Ramsey misses out through injury
In the February draw for the competition's qualification phase, Wales were put into Group B alongside Andorra, Belgium, Bosnia-Herzegovina, Cyprus and Israel.
A trip to Andorra on September 9 marks the start of what looks set to be a tough campaign for a nation seeking a berth at their first major tournament since the 1958 World Cup.
Chris Coleman's side have only one other scheduled friendly ahead of that visit to the principality, with a testing fixture against the Netherlands set to take place on June 4.
Although more matches may be announced at a later date, manager Coleman recognises the importance of making the most of each game, and he is particularly keen to utilise star asset Gareth Bale.
He said: "We only have a limited number of preparation matches, so it is important that he is with us, but I will monitor the situation.
"He has had a great start at Real Madrid, with plenty of goals and assists. He is adapting well to living in a foreign country and I think he is doing great."
Bale has been in good form for the Spanish giants in his debut season at the Santiago Bernabeu, scoring 10 goals and getting nine assists in his first 17 league appearances.
The world's most expensive player has only featured in two of Wales' last six internationals, mostly down to a problematic spell with injuries at the beginning of the season.
Iceland made it to the play-off stage of the 2014 World Cup qualifiers, but were defeated 2-0 on aggregate by Croatia after holding them to a 0-0 draw at home in the first leg.
They have since played one friendly, which ended in a 2-0 defeat to Sweden, and they have been handed a tough draw for their upcoming Euro 2016 qualifiers.
Latvia and Kazakhstan may prove to be relatively straightforward opposition, but Czech Republic, Turkey and the Netherlands all join them, making a finals appearance in France an unlikely goal.
Wales and Iceland have only faced each other six times since the start of 1980, with the latter emerging victorious just once in a 1984 World Cup qualifier.
While Bale may have been included in the squad, there is no place for Aaron Ramsey, who misses out with a thigh injury that has kept him out of action since December.
Coleman could, however, hand a debut to Manchester City youngster Emyr Huws, with the 20-year-old impressing while on loan at Birmingham City in the Championship.
Swansea City captain Ashley Williams is suffering with a bout of illness, but did play in his side's 1-1 draw with Crystal Palace on Sunday.