The Quadrophenia star famously loaned his vocals to the band's 1994 track, but hasn't appeared on any further songs until now.
Daniels is featured on songwriter Tim Arnold's album The Soho Hobo, about the colourful area of London famous for its nightlife and sex industry venues.
Arnold tells the London Evening Standard, "What people don't realise is that Phil is a phenomenal musician. It was a song that I had written with him in mind and it was only through good luck that he wanted to do the song. He hasn't done anything since Parklife, so I feel very lucky.
"It was a really incredible experience. We went into a tiny studio in Soho and he just knew and understood the subtext of the song."
Spandau Ballet star Gary Kemp also appears on the record, as does Arnold's partner, British actress Jessie Wallace.