The experienced Argentinian will join nine-time World Rally champion Sebastien Loeb and two-time Dakar winner Nani Roma in piloting the BRX Hunter T1+ at the Saudi Arabia event from 1-14 January.
Last weekend organisers revealed the route for next year's rally that will see competitors cover a distance of 8375 kilometres including 12 timed stages.
Terranova brings a wealth of experience to the team having made his Dakar debut in 2005 on a motorcycle and has since contesting every event in the car class from 2009 onwards. The 42-year-old's best result at the gruelling rally is a pair of fifth place finishes achieved in 2013 and 2014.
Terranova competed with the BRX team alongside Loeb and Roma at Baja Aragon in Spain back in July in the Hunter T1 car, setting two fastest sector times, with Loeb collecting seven more out of a possible 11.
"I have spoken to Nani and Seb and they have said how good the new T1+ feels and that despite its greater size and additional weight, it still feels just as easy to drive and is much better in the rocky conditions," said Terranova.
"I am looking forward to seeing the team again and beginning my preparations for my 17th Dakar."
All three will be joined by their current co-drivers with Fabian Lurquin alongside Loeb, Alex Haro with Roma and Dani Oliveras with Terranova.
Both Loeb and Roma have tested the car, while Terranova will join them in Dubai to get several days in the Hunter in early December.
The event promises to be the start of a busy 2022 campaign with the Frenchman heavily linked to a World Rally Championship return driving for M-Sport Ford at the Monte Carlo Rally from 20-23 January.]
Loeb completed his second test in the M-Sport Rally1 Ford Puma last week in France.
Should Loeb contest the event he will do so without Daniel Elena as his co-driver, who has recently confirmed his retirement from rallying.
"I'm turning the page," said Elena on social media. "I want to concentrate on other things, I'm turning 50 next year and I have my shop and I can't really focus on two things at once, [my wife] Anais will be the first one to tell you that! So, this is why we are making this special announcement."
Loeb's Prodrive team has already completed extensive testing of the Hunter T1+, built to the new 2022 Dakar regulations, and will carrying out further testing in the United Arab Emirates over the coming weeks focussed on endurance and navigational exercises, before the Dakar.
The team had to halt a test in Dubai last month after a re-fuelling fire which forced the squad to pull out of the Abu Dhabi Desert Challenge.
A Prodrive spokesman told Motorsport.com that a mechanic suffered severe burns in the fire and remains in a Dubai hospital undergoing treatment.