The 23-year-old, who was injured when the Warriors won the Guinness PRO12 title a year ago, missed Scotland's 2-0 series win in Japan last month after Cotter gave his blessing to Bennett's Olympic dream.
Bennett and former Edinburgh player Mark Robertson are the only Scots in the Team GB men's squad, with Jamie Farndale and Lee Jones among those cut from the training squad.
"I love playing rugby for Scotland, but it is not every day you get a chance to go to an Olympic Games," said Bennett.
"I had a chat with Scotland head coach Vern Cotter and he understood my reasons while Scottish Rugby backed my decision and I am just glad I have been able to repay their faith by getting selected.
"It is disappointing that a number of other Scots missed out on selection because they were flying for the national team during the World Series last season, but there is so much quality in the squad I am sure we can go to Rio and put on a good show."
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