Raonic, from Thornhill, Ont., is in Group B with Switzerland's Roger Federer, Britain's Andy Murray and Japanese newcomer Kei Nishikori.
Raonic qualified for the London event after a strong performance at last week's Paris Masters. Raonic defeated Federer for the first time in the quarter-finals before losing to top-ranked Novak Djokovic of Serbia in the final.
Djokovic, a two-time defending champion, was handed a favourable draw in Group A. He was joined by slumping Australian Open champion Stan Wawrinka of Switzerland, U.S. Open winner Marin Cilic of Croatia and Tomas Berdych of the Czech Republic.
Djokovic, this year's Wimbledon champion, is unbeaten on indoor courts the past two years and is vying with Federer for the year-end No. 1 ranking.
Third-ranked Rafael Nadal of Spain is skipping the tournament because of appendicitis.
Raonic rose two spots to No. 8 in the latest ATP men's singles rankings.
He improved to 1-6 lifetime against Federer with his victory last week in Paris. Raonic has a 1-4 mark against Nishikori and is 3-1 against Murray.
In men's doubles, Toronto's Daniel Nestor was fourth in the rankings behind Serbian partner Nenad Zimonjic. The 2008 and 2010 Tour Finals doubles champions are in the eight-team draw for this year's competition.
Bob and Mike Bryan of the United States share the top spot in the latest doubles rankings.
The ATP Finals begin Sunday at the O2 Arena.