A battling Melbourne will face the Dolphins on Friday night in Brisbane, with a seventh successive loss equalling an all-time club low.
Peel will make his NRL debut, named to start on the wing with Nick Meaney shifting back to the centres and Manaia Waitere to the bench.
The 20-year-old's preferred position is fullback, having scored six tries in six matches in the NSW Cup this season.
He will have his hands full marking either Selwyn Cobbo or Jamayne Isaako, with Jack Bostock joining Herbie Farnworth in the centres in his first appearance of the season following last year's knee injury.
Faalogo has started on the wing 10 times in his 30-game Storm career but Bellamy said the 23-year-old had earned the right to retain the No.1 jersey.
While the Storm's attack has struggled, the 23-year-old has crossed 10 times to sit joint-second in the competition's try-scoring.
"That's probably his (Peel's) best position fullback, but Sua's probably been, if not our best player, he's certainly been our top three this year," Bellamy told AAP.
"We just wanted to put Hugo in there and we know he's going to really put the effort in and so that was the position that we decided for him.
"He'll handle that OK and he's got some experienced players around them so they'll help him."
Peel played rugby union and touch football as a junior and was scouted from the Melbourne Rebels pathway program.
His two older brothers, Darcy and Lachlan, were also schoolboy rugby stars but after testing the waters in league at the Storm opted to stick with the 15-man code.Â
"He's a great kid, just works really hard and to be quite honest, that's probably what we need at the moment," Bellamy said.
"He's got a great work rate and hopefully we'll the product of his hard work on Friday night."
Former Panthers playmaker Trent Toelau has also been included on the bench as he looks to make his Storm debut, with three Victorians in the match-day squad equalling Melbourne club record.
