diff --git a/.changelog/8564.txt b/.changelog/8564.txt
new file mode 100644
index 000000000..2cb931f68
--- /dev/null
+++ b/.changelog/8564.txt
@@ -0,0 +1,3 @@
+```release-notes:improvement
+cli: the `consul connect envoy --envoy_statsd_url` flag will now resolve the `$HOST_IP` environment variable, as part of a full url.
+```
diff --git a/website/content/docs/connect/proxies/envoy.mdx b/website/content/docs/connect/proxies/envoy.mdx
index cd9188588..f30b7fdbf 100644
--- a/website/content/docs/connect/proxies/envoy.mdx
+++ b/website/content/docs/connect/proxies/envoy.mdx
@@ -130,15 +130,17 @@ definition](/docs/connect/registration/service-registration) or
   ~> **Note:** currently the url **must use an ip address** not a dns name due
   to the way Envoy is setup for StatsD.
 
+  Expansion of the environment variable `HOST_IP` is supported, e.g.
+  `udp://${HOST_IP}:8125`.
+
   Users can also specify the whole parameter in the form `$ENV_VAR_NAME`, which
   will cause the `consul connect envoy` command to resolve the actual URL from
   the named environment variable when it runs. This, for example, allows each
   pod in a Kubernetes cluster to learn of a pod-specific IP address for StatsD
   when the Envoy instance is bootstrapped while still allowing global
   configuration of all proxies to use StatsD in the [global `proxy-defaults`
-  configuration entry](/docs/connect/config-entries/proxy-defaults). The env variable must contain a full valid URL
-  value as specified above and nothing else. It is not currently possible to use
-  environment variables as only part of the URL.
+  configuration entry](/docs/connect/config-entries/proxy-defaults). The env
+  variable must contain a full valid URL value as specified above and nothing else.
 
 - `envoy_dogstatsd_url` - The same as `envoy_statsd_url` with the following
   differences in behavior: