* Palu, Giteau return
* Higginbotham, Cummins (NYSE:CMI) drop out
* Prop Smith could make debut against All Blacks (Adds quotes)
By Nick Mulvenney
SYDNEY, July 31 (Reuters) - Number eight Wycliff Palu and centre Matt Giteau have been recalled to the Australia squad for next week's Rugby Championship decider against New Zealand with uncapped prop Toby Smith also getting the nod for the Sydney test.
Palu was rested for the victories over South Africa and Argentina and returns in place of Scott Higginbotham, while a recall for Giteau after he missed the test against the Pumas with a sternum injury means winger Nick Cummins drops out.
"Palu's obviously a very important player in the fabric of the team and just to have him around training, nudging a few players here and there, gives us more self-belief," coach Michael Cheika told reporters.
"We're starting to get a few more experienced players back in the groove with himself and the likes of Matt Giteau back it's really helpful."
Smith was rewarded for a fine season with the Melbourne Rebels and, with four props required on matchday, looks likely to make his debut against the All Blacks at the Olympic Stadium on Saturday week.
Third string hooker James Hanson was considered surplus to requirements for a match on home soil, while it was too early for Kane Douglas despite the lock becoming newly eligible for test rugby after signing a deal with Queensland on Friday. ID:nL3N10B1V1
"I don't think he's picked up his bags from the airport yet has he?" Cheika said of Douglas, who is on the comeback trail after back surgery.
"What would be best to do there is talk to him, see how he feels physically, might give him a runaround later on the week and see if he's in condition to have a look at him next week."
Australia could win a first southern hemisphere title since 2011 if they can beat the world champions in the final round of the Rugby Championship, which is shortened this year because of the World Cup.
It has also been four years since the Wallabies last beat New Zealand and Cheika is under no illusion as to how much work it will take to beat the world's best team.
"The reality is, they're the world champions, we're the underdogs," Cheika said.
"What we need to do is to focus every day at training, use every single minute to get ready to face the world's best. That's all we can do."
Squad:
Forwards - James Slipper, Scott Sio, Greg Holmes, Sekope Kepu, Toby Smith, Stephen Moore, Tatafu Polota-Nau, Rob Simmons, Will Skelton, James Horwill, Dean Mumm, Scott Fardy, Wycliff Palu, Ben McCalman, Sean McMahon, Michael Hooper, David Pocock.
Backs - Nick Phipps, Nic White, Bernard Foley, Quade Cooper, Matt Toomua, Matt Giteau, Christian Lealiifano, Kurtley Beale, Tevita Kuridrani, Adam Ashley-Cooper, Drew Mitchell, Joe Tomane, Henry Speight, Israel Folau.