Wales international Williams is one of three changes made by Head Coach Danny Wilson for the big clash at Rodney Parade.
Lock James Down returns in the second row while Josh Turnbull comes in to wear the No.6 jersey.
Centre Cory Allen could make his comeback, after injuring his hamstring in the Rugby World Cup, as he is named among the replacements.
Head Coach Danny Wilson said: “I have been on both sides of playing at Rodney Parade. Early in my coaching career I was at Dragons and saw the home advantage they have. They have a passionate crowd and it’s a great venue to play at.
“The away challenge of playing at Rodney Parade is well documented; you have got to go there extremely motivated and use it as a driving force to your performance.
“It’s a derby game so we have to try and keep the crowd quiet and try to take the sting out of the Dragons. It’s a game we are all looking forward to.
“These games are the closet you get to an international and huge for everyone involved. We want to come out of these with performances and wins to give all involved a good Christmas and New Year.”
Cardiff Blues: 15 Rhys Patchell, 14 Alex Cuthbert, 13 Garyn Smith, 12 Rey Lee-Lo, 11 Tom James, 10 Jarrod Evans, 9 Lloyd Williams; 1 Gethin Jenkins (c), 2 Kristian Dacey, 3 Taufa’ao Filise, 4 Lou Reed, 5 James Down, 6 Josh Turnbull, 7 Josh Navidi, 8 Manoa Vosawai
Replacements: 16 Ethan Lewis, 17 Sam Hobbs, 18 Dillon Lewis, 19 Macauley Cook, 20 Cam Dolan, 21 Tavis Knoyle, 22 Cory Allen, 23 Dan Fish