Jaywardene became Sri Lanka captain in 2006, leading the country for three years before stepping down after last year's tour of Pakistan, which was abandoned when the tourists' bus was attacked in Lahore on 3 March.
He is ninth in the all-time leading Test run scorers in history with 9168 runs from 111 matches.
Jayawardene had been groomed to lead Sri Lanka since the early days of his Test career
"It was proved to be a good decision," select committee chairman Aravinda de Silva told BBC Sinhala.
Sri Lanka squad for the second Test against India in Colombo: Kumar Sangakkara (capt), Tillakaratne Dilshan, Tharanga Paranavithana, Mahela Jayawardene (vice-captain), Thilan Samaraweera, Angelo Mathews, Thilina Kandamby, Prasanna Jayawardene (wk), Ajantha Mendis, Chanaka Welagedara, Suraj Randiv, Rangana Hearth, Dhammika Prasad, Dilhara Fernando, Lahiru Thirimanne, Nuwan Pradeep.
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