diff --git a/Dockerfile b/Dockerfile
index 8b72f70618..7d30696d4a 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -1,6 +1,8 @@
 ARG BASE
 FROM ${BASE}
 
+ENV IN_DOCKER=1
+
 # Add backend server - Application Layer
 ARG JAR_FILE=./app/server/dist/server-*.jar
 ARG PLUGIN_JARS=./app/server/dist/plugins/*.jar
diff --git a/app/server/appsmith-interfaces/src/main/java/com/appsmith/util/WebClientUtils.java b/app/server/appsmith-interfaces/src/main/java/com/appsmith/util/WebClientUtils.java
index 3f7de88877..189b8e7d06 100644
--- a/app/server/appsmith-interfaces/src/main/java/com/appsmith/util/WebClientUtils.java
+++ b/app/server/appsmith-interfaces/src/main/java/com/appsmith/util/WebClientUtils.java
@@ -25,14 +25,15 @@ import java.net.InetAddress;
 import java.net.InetSocketAddress;
 import java.net.UnknownHostException;
 import java.util.Arrays;
+import java.util.Collections;
+import java.util.HashSet;
 import java.util.List;
 import java.util.Set;
 
 @Slf4j
 public class WebClientUtils {
 
-    private static final Set<String> DISALLOWED_HOSTS =
-            Set.of("169.254.169.254", "0:0:0:0:0:0:a9fe:a9fe", "fd00:ec2:0:0:0:0:0:254", "metadata.google.internal");
+    private static final Set<String> DISALLOWED_HOSTS = computeDisallowedHosts();
 
     public static final String HOST_NOT_ALLOWED = "Host not allowed.";
 
@@ -45,6 +46,18 @@ public class WebClientUtils {
 
     private WebClientUtils() {}
 
+    private static Set<String> computeDisallowedHosts() {
+        final Set<String> hosts = new HashSet<>(Set.of(
+                "169.254.169.254", "0:0:0:0:0:0:a9fe:a9fe", "fd00:ec2:0:0:0:0:0:254", "metadata.google.internal"));
+
+        if ("1".equals(System.getenv("IN_DOCKER"))) {
+            hosts.add("127.0.0.1");
+            hosts.add("0:0:0:0:0:0:0:1");
+        }
+
+        return Collections.unmodifiableSet(hosts);
+    }
+
     public static WebClient create() {
         return builder().build();
     }
diff --git a/app/server/appsmith-server/src/main/java/com/appsmith/server/helpers/RTSCaller.java b/app/server/appsmith-server/src/main/java/com/appsmith/server/helpers/RTSCaller.java
index 09b5959002..c5c2711584 100644
--- a/app/server/appsmith-server/src/main/java/com/appsmith/server/helpers/RTSCaller.java
+++ b/app/server/appsmith-server/src/main/java/com/appsmith/server/helpers/RTSCaller.java
@@ -1,15 +1,16 @@
 package com.appsmith.server.helpers;
 
-import com.appsmith.util.WebClientUtils;
 import jakarta.annotation.PostConstruct;
 import lombok.NonNull;
 import org.springframework.beans.factory.annotation.Value;
 import org.springframework.http.HttpMethod;
 import org.springframework.http.MediaType;
+import org.springframework.http.client.reactive.ReactorClientHttpConnector;
 import org.springframework.stereotype.Component;
 import org.springframework.web.reactive.function.BodyInserters;
 import org.springframework.web.reactive.function.client.WebClient;
 import reactor.core.publisher.Mono;
+import reactor.netty.http.client.HttpClient;
 import reactor.netty.resources.ConnectionProvider;
 
 import java.time.Duration;
@@ -33,13 +34,18 @@ public class RTSCaller {
             rtsPort = "8091";
         }
 
-        webClient = WebClientUtils.builder(ConnectionProvider.builder("rts-provider")
-                        .maxConnections(100)
-                        .maxIdleTime(Duration.ofSeconds(30))
-                        .maxLifeTime(Duration.ofSeconds(40))
-                        .pendingAcquireTimeout(Duration.ofSeconds(10))
-                        .pendingAcquireMaxCount(-1)
-                        .build())
+        final ConnectionProvider connectionProvider = ConnectionProvider.builder("rts-provider")
+                .maxConnections(100)
+                .maxIdleTime(Duration.ofSeconds(30))
+                .maxLifeTime(Duration.ofSeconds(40))
+                .pendingAcquireTimeout(Duration.ofSeconds(10))
+                .pendingAcquireMaxCount(-1)
+                .build();
+
+        // We do NOT use `WebClientUtils` here, intentionally, since we don't allow connections to 127.0.0.1,
+        // which is exactly the _only_ host we want to hit from here.
+        webClient = WebClient.builder()
+                .clientConnector(new ReactorClientHttpConnector(HttpClient.create(connectionProvider)))
                 .baseUrl("http://127.0.0.1:" + rtsPort)
                 .build();
     }