Norrie stepped in as a second alternate at the season-ending event at the Pala Alpitour following Stefanos Tsitsipas' withdrawal due to an elbow injury on Thursday (AEDT).
The Briton got off to a flyer in his first ATP Finals match, but eighth seed Ruud hit back to win 1-6 6-3 6-4 in the night session after losing his opening Green Group contest to world number one Novak Djokovic.
Ruud lost only two games when the two met in the San Diego Open final last month and Norrie looked hungry for revenge as he bossed the first set, grasping both break-point opportunities.
Ruud won the only break point of the second set to force a decider and just one further break was enough to get him up and running in the competition.
After becoming the first Norwegian to win an ATP Finals match, Ruud will do battle with Andrey Rublev to join Djokovic in qualifying from the group.