The Racing 92 playmaker played no part in the Six Nations before the coronavirus-enforced break after being disciplined for a "breach of team protocol" ahead of the opening match against Ireland in Dublin.
It appeared there would be no way back for Russell under Townsend after he told the Sunday Times there would need to be "big changes" for him to resume his Scotland career, taking a dig at the head coach's style and man-management.
Townsend then responded by questioning the number 10's commitment to playing for his country, with Russell also having stated the pair have "no relationship".
Their issues have seemingly been resolved, though, after 28 year-old Russell was named in the 40-man squad for the conclusion of their Six Nations campaign against Wales and the inaugural Autumn Nations Cup.
The squad, captained by Stuart Hogg, features three uncapped players in Glasgow Warriors prop Oli Kebble, Edinburgh winger Duhan van der Merwe and Harlequins scrum-half Scott Steele.
Townsend told Scottish Rugby's official website: "The squad we have selected is formed by the majority of the players we worked with in the Six Nations alongside players who have grabbed their opportunity in the past few weeks and have been in form for their respective teams."
Scotland begins its autumn Test matches at Murrayfield against Georgia on 23 October before facing Wales in Llanelli on 31 October for the conclusion of their Six Nations.
It will then take on France and Fiji in Pool B of the new Autumn Nations Cup, as well as an away Test match against Italy.