The Aston Villa man has been forced to accept a backup role to captain Harry Kane throughout the tournament so far, while also competing with Ivan Toney for minutes off the bench.
Prior to the semi-final, Watkins had only played 20 minutes at the Euros - coming off the bench in the group-stage draw with Denmark - as Toney was preferred as a substitute against Slovakia and Switzerland in the earlier knockout rounds.
The Brentford striker had a telling impact in both games, setting up Kane's winner in the last 16 before dispatching one of England's five perfect penalties in the quarter-final, but Gareth Southgate instead chose Watkins to replace a jaded Kane on Wednesday.
The bold move was one of two substitutions that proved to be a masterstroke from Southgate, as with 90 minutes on the clock, Palmer played a crisp pass into Watkins, who turned Stefan de Vrij and magnificently found the far side of the net from a tight angle.
Watkins swore on his kid's life Palmer would assist him
Watkins's first-ever major tournament goal for England completed an incredible comeback from the Three Lions, who have now reached back-to-back European Championship finals and will meet Spain in Berlin on Sunday for the right to lift the Henri Delaunay Trophy aloft.
Speaking to ITV Sport after sealing England's place in the final, Watkins swore on his kid's life that he told Palmer he would assist him in Dortmund, and he described scoring the winning goal as the "best feeling ever".
"Unbelievable, I've been waiting for that moment for weeks. It's taken a lot of hard work to get to where I am today and I'm grateful that I've got the opportunity and I've grabbed it with both hands and I'm delighted. I'm just delighted," the 28-year-old said.
"I swear on my life, on my kid's life, I said to Cole Palmer: 'we're coming on today and you're going to set me up' and that's why I was so happy with Coley. I knew as soon as he got the ball, he was going to play me and you've got to be greedy, touch and finish. And when I've seen it go in the bottom corner, that's the best feeling ever."
Before their magical link-up in the 90th minute, Watkins and Palmer watched on helplessly as Xavi Simons robbed Declan Rice of the ball in the early exchanges before putting the Netherlands ahead with a sublime finish.
Watkins: 'England have the bounce back factor'
However, as was the case against Switzerland in the quarter-finals, England responded brilliantly to going a goal down and were level just 11 minutes later, as Harry Kane crashed home a controversially-won penalty.
Ronald Koeman's men did have the better of the second-half chances before Watkins's terrific finish, and the ex-Brentford man believes that he and his teammates possess an innate ability to come from behind.
"Yeah, exactly, we've got that kind of bounce back factor, going to go behind, but it seems to kick us into gear and we never give up. We've won on penalties, we've come from behind. One more game now, one more game," Watkins added.
Having also fought back from a goal down to sink Switzerland after doing it the hard way against Slovakia, England are now the first team to reach the men's Euros final despite falling behind in both the quarter-finals and semi-finals.
That record was just one of several that England's players either matched or broke at the Signal Iduna Park in Wednesday's semi-final triumph, which was the first game that they had won in 90 minutes since their opening victory over Serbia.