The national championship front-runners have nothing to fear from the Geraldine driver as he will enter the Stadium Finance BDA Escort, which he raced in the event two years ago, in the classic category.
Paddon, who has been signed by Hyundai Motorsport to contest seven events in the World Rally Championship and is based in Germany, was pleased the deal to drive on home soil had come together.
''Huge thanks to Tony Gosling for letting me loose behind the wheel of his car again. Really looking forward to going sideways - rear-wheel-drive-style,'' he said.
It will be a welcome competitive time behind the wheel for Paddon, before he and long-time co-driver John Kennard begin their international campaign a month after Otago with Rally Italia Sardegna from June 5 to 8.
For the Otago rally, Paddon will have Malcolm Read in the co-driver's seat as part of his desire to help young drivers into the sport, Christchurch car dealership director Gosling said.
While Otago rally fans will be pleased to see Paddon in action at the rear of the field, the Allcomers competitors will be shifted further up the front, courtesy of a revised seeding order in the May 10-11 event.
In an initiative introduced for all New Zealand Rally Championship rounds, Allcomers competitors will be seeded, on merit, among those crews contesting the NZRC component of the rally.
Previously, the Allcomers competitors were at the back of the field, with many of the spectators having moved on to the next location before they arrived.
''A large part of the Allcomers are the more local competitors, and we are excited that this initiative will provide more prominence, and encouragement for them to compete,'' Otago Rally spokesman Roger Oakley said.
''The Allcomers class is an ideal way for locals and newer competitors to do a lot of competitive distance and measure themselves against the best.''
Two recent Allcomers winners, Balclutha drivers Rhys Gardner (2012) and Dean Bond (2013), both responded positively to the prospect of running higher up the order, and with potentially better road conditions than they have had in previous years.
Although Bond has decided not to enter this year, he said from a sponsorship perspective running at the back of the field was not ideal, as by the time he went through ''most spectators had left to keep up with the front group of cars''.
Gardner will be contesting the NZRC section this year but in the past it was difficult to gain a true benchmark against the top drivers, when competing at the back of the pack, he said.
''The roads are so swept that you are not comparing these conditions with the NZRC guys.''
This year's event will see the NZRC and Allcomers competitors run first on the road, followed by the International Classic Rally of Otago.
