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American Hunter Mahan, Northern Ireland's Darren Clarke, South Africans Charl Schwartzel and Louis Oosthuizen will also head to the Amata Spring Country Club, 80 kilometres east of Bangkok, for the second edition of the tournament from December 6-9.
Englishman Westwood shot a stunning 12-under 60 in the opening round before going on to win the inaugural edition last year by seven shots.
The world number four will face tough competition in this year's tournament with the Americans Watson and Mahan making their debuts in Thailand and the local challenge led by three-times Asian Tour order of merit winner Thongchai Jaidee.
"I had an incredible time last year. The fans were great and backed me all week," Westwood was quoted as saying in a statement. "I love Amata Spring as its layout suits my style of play and the greens are fast and firm.
"I'm excited to be returning. Anyone can win the tournament but I'll do my best to defend the title."
Left-hander Watson, who won his first Major in April at Augusta National after an emotional playoff victory against Oosthuizen, was looking forward to the experience.
"My friends have told me lots of nice things about the country, the beautiful beaches and the great food and of course the friendly people," Watson said.
"I'm really excited about playing in the Thailand Golf Championship in front of all the fans there and I also hope to experience the Thai culture."
