Iyer had been out since October after being hospitalised following a spleen injury while attempting a catch in an ODI against Australia in Sydney.
India's ODI vice-captain missed the home series against South Africa but recently returned to domestic action with Mumbai, hitting 82 and 45 in the ongoing Vijay Hazare Trophy.
New Zealand's three-match ODI series in India will start on Sunday in Vadodara, followed by matches in Rajkot and Indore.
The teams will then contest a five-match T20 series, starting on 18 January, ahead of the T20 World Cup that India will co-host with Sri Lanka.
India ODI squad: Shubman Gill (capt), Rohit Sharma, Virat Kohli, KL Rahul (wk), Shreyas Iyer (vice-capt), Washington Sundar, Ravindra Jadeja, Mohammed Siraj, Harshit Rana, Prasidh Krishna, Kuldeep Yadav, Rishabh Pant (wk), Nitish Kumar Reddy, Arshdeep Singh, Yashasvi Jaiswal
The Bangladesh Cricket Board (BCB) says the ICC "has conveyed its willingness to work closely" with the country due to security concerns about playing in India at the T20 World Cup.
Bangladesh will not travel to India for their group-stage matches at the 2026 ICC Men's T20 World Cup, citing concerns over player safety amid escalating political tensions.
Shubman Gill has been dropped from India's squad for the T20 World Cup with Axar Patel named as the team's new vice-captain.
The Proteas fell short in a mammoth run-chase to lose by 30 runs in the fifth and final T20I against India in Ahmedabad as the hosts sealed a 3-1 victory in the five-match series.
