Varela had been one of the fringe players for the World Cup but a string of strong performances in friendly matches was enough to book his place.
The 24-year-old can be played as a lone striker, behind the front two or at the heart of Uruguay's midfield.
He looks unlikely to start from the outset of the tournament despite his new found form.
His appearances for the national side have been fairly limited. He was called up for just three of the qualifiers.