Southby, 62, is regarded as one of the best full-backs to play the game, playing 268 games between 1971-84.
Recruited from Bendigo league club Sandhurst, he made an instant impact at Carlton, winning the club best and fairest award in his first two seasons.
He played a pivotal role in the Blues' 1972 and 1979 premierships, but missed out in playing in the 1981-82 flags because of injury.
In Carlton's Team of the Century announced in 2000, he was named alongside AFL Team of the Century full-back Stephen Silvagni in a back pocket.
The champion defender was acknowledged by president Stephen Kernahan for his outstanding service to the club on Wednesday night.
Southby was first inducted into Carlton’s Hall of Fame in 1994, along with the AFL Hall of Fame in 2000. He remains heavily involved with the Blues through the Spirit of Carlton group, which holds several fund-raising functions for the club
Former Norm Smith Medal winner David Rhys-Jones was also inducted into Carlton’s Hall of Fame at Wednesday night's event.
After leaving the Swans and joining the Blues in 1985, the controversial utility went on to play 108 matches for Carlton, including the 1987 premiership win.
The Carlton Hall of Fame was established in 1987.
The nomination panel considers a candidate's outstanding service and overall contribution to Carlton, and may consider a candidate's individual record, ability, integrity, sportsmanship and character.
To be considered for nomination, a player or coach must be retired. There is no qualifying period after retirement.
