Bryan Singer has praised the Game of Thrones actor, saying that he was his first choice for the role.
"He's not going to be a CGI character," the director told IGN. "He'll be himself.
"Not that he'll be playing Peter Dinklage, he'll be playing this character. It's not a shy character. He's just such a phenomenal actor - I'm a huge fan of Peter's and Game of Thrones.
"He was my first choice and I was really happy [about the casting]. It's so funny to talk to him because he does that impeccable accent [on Game of Thrones] and then you talk to him and he's this guy from New Jersey."
Singer previously hinted that the 20th Century Fox film would feature a fully CGI character, leading to speculation that Dinklage would take on the role.
The actor has also been rumoured to play Sentinel creator Bolivar Trask.
Dinklage will join the returning cast of James McAvoy, Patrick Stewart, Michael Fassbender, Jennifer Lawrence, Hugh Jackman, Ian McKellen, Anna Paquin, Ellen Page and Shawn Ashmore on the film.
X-Men: Days of Future Past is scheduled for release on July 18, 2014.