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Would it be practical for a small, largely isolated country to have a drafted army to be hired out to other countries as guards for caravans or a policing force? The soldiers would all serve around 4 years, not counting training. How would this work... would the patrons pay the rulers of the country or the soldiers themselves? Is this a practical idea for a nation with fewer resources to get money? (the Country from which the mercenaries come originally is peaceful, and doesn't need a standing army beyond a small policing force.) Any ideas of what would keep an ordinary low ranked soldier loyal to the original country if he's not being paid directly? (Besides fanatical nationalism) How would this work in regards to international relationships?
(My world is medieval-ish.)

This practice was done all the time in Medievel Europe, the most famous being the Swiss Guard which was formed in the late 15th century and were stationed as guards in foreign courts until 1847 amendment to the Swiss Constitution outlawed all foreign military service with exception to the Pontifical Swiss Guard (The Swiss Guard that protects the Pope to this very day). The Swiss also had mercenary regiments in foriegn armies and they were considered to be the best until 1515 when German's Landsknechte contracted to France beat the Swiss mercenaries in the Battle of Marignano of 1515.

In fact, if you're a US questioner, you should know that one of the most famous actions in the Revolutionary War was taken to defeat German Hessian Mercenaries. Washington's Crossing of the Delaware and subsequent Battle of Trenton was to catch a large contingent of Hessian sleeping off a Christmas Party and was so successful, the Continental Army filled their re-enlistment commitments that were about to expire in the next week and cripple their war effort. The fact that the Hessian's recruitment by the British to such a degree that they represented 1/4 of their fighting force in the Revolutionary War was a really sore point for a lot of Colonials (From their point of view, Britain had hired Germans to kill Britain) that it was listed as one of the 27 grievances in the Declaration of Independence (The Revolutionary War broke out in 1775, but the Colonists weren't fighting for Independence until 1776... The Hessian were one of, if not, the final straws that made the Colonials settle on full independence from Britain, rather than one of several options.

Edit: It should be pointed out mercenaries were used as supplemental forces, rarely full armies. Machavelli pointed out there ups and downs of using them, and favored their use be carefully watched.

The United Nations peacekeeping forces work kind of like this.

Of 106,576 UN peacekeeping personnel...

Bangladesh, Ethiopa, India, Pakistan and Rwanda currently contribute
the largest number of peacekeepers - having a share of 36 per cent of
the UN's force. The US and Russia, meanwhile, only contribute around
70 personnel each, and the UK contributes a further 289. This takes
the total for the five permanent members of the UN Security Council to
just 4,438. These countries have significantly larger defense budgets
than the countries topping the list, although Washington pays for more
than 28 per cent of the UN peacekeeping budget.
The developing countries who donate large numbers to UN peacekeeping can use it as a source of income, helping explain their large
contributions.

Bold emphasis mine.

https://www.telegraph.co.uk/news/worldnews/asia/china/11898603/UN-peacekeepers-How-many-personnel-does-each-country-contribute.html

If sending your country's soldiers to work for an outside entity and getting pay in return makes them mercenaries, then these UN peacekeeping personnel are mercenaries.

It could be a system similar to the Dorsai of Gordon Dickson, which was actually based loosely on medieval Swiss practices. The Swiss were notable mercenaries through the Renaissance, getting shout outs from Machiavelli and Shakespeare.

It doesn't have to be a mandatory thing for it to be an important export to the country. If being a soldier is a good way for a second or third son to get enough money for his own farm/mill/bakery/hookah parlor then there will be lines out the door. Men in their late teens/early 20s are infamous for being aggressive and short sighted.

People who enjoy warring and are good at it could come back and use their earnings to recruit younger men into squads of their own. After a couple of successful campaigns, their recruits could afford to front money for recruits of their own as well as pay a percentage up.

Eventually, it becomes time to retire to the simple life selling cuckoo clocks and chocolates and telling stories of that time that Tex was confused about what size coin to give the prostitute.

https://en.wikipedia.org/wiki/Swiss_mercenaries

This sounds rather similar to the Gurkha soldiers;

The Gurkhas or Gorkhas (/ˈɡɜːrkə, ˈɡʊər-/) with endonym Gorkhali
(Nepali: गोरखाली) are soldiers native to the Indian subcontinent of
Nepalese nationality and ethnic Nepalis of Indian nationality
recruited for the British Army, Nepalese Army, Indian Army, Gurkha
Contingent Singapore, Gurkha Reserve Unit Brunei, UN peacekeeping
force and war zones around the world.

As to whether it is practical depends on so many factors i cant list all of them. Personally i think the Gurkha Contingent in Singapore is an excellent example.

The Gurkha contingent has its own living area within Singapore and are prevented from integrating into the society at large due to their use as a neutral peace-keeping force. At the end of their tenure, as they are temporary, the soldiers must go back to their country.

The temporary aspect is likely what keeps them loyal to their own country, and the reason many enroll to be part of the contigent is due to it being

considered highly honorable to serve as a GC member back in Nepal

Aswell as

The good income, their way of life, and affordable education for their children (or future children) are further draws.

I hope this helps and you can find much more information through the links!