The 29-year-old arrived at Vicarage Road from Wigan Athletic in January, when he agreed a contract until the end of the season.
However, having impressed manager Slavisa Jokanovic during his short stint with the Hornets, Watson has now committed himself to the club until 2017, with the option of a further 12 months.
To date, Watson has made eight starts and one appearance as a substitute for the Championship high-flyers.
Restore Data
| Team | P | W | D | L | F | A | GD | PTS | |
| C | Leicester CityLeicester | 46 | 31 | 4 | 11 | 89 | 41 | 48 | 97 |
| P | Ipswich TownIpswich | 46 | 28 | 12 | 6 | 92 | 57 | 35 | 96 |
| 3 | Leeds UnitedLeeds | 46 | 27 | 9 | 10 | 81 | 43 | 38 | 90 |
| P | Southampton | 46 | 26 | 9 | 11 | 87 | 63 | 24 | 87 |
| 5 | West Bromwich AlbionWest Brom | 46 | 21 | 12 | 13 | 70 | 47 | 23 | 75 |
| 6 | Norwich CityNorwich | 46 | 21 | 10 | 15 | 79 | 64 | 15 | 73 |
| 7 | Hull City | 46 | 19 | 13 | 14 | 68 | 60 | 8 | 70 |
| 8 | Middlesbrough | 46 | 20 | 9 | 17 | 71 | 62 | 9 | 69 |
| 9 | Coventry CityCoventry | 46 | 17 | 13 | 16 | 70 | 59 | 11 | 64 |
| 10 | Preston North EndPreston | 46 | 18 | 9 | 19 | 56 | 67 | -11 | 63 |
| 11 | Bristol City | 46 | 17 | 11 | 18 | 53 | 51 | 2 | 62 |
| 12 | Cardiff CityCardiff | 46 | 19 | 5 | 22 | 53 | 70 | -17 | 62 |
| 13 | Millwall | 46 | 16 | 11 | 19 | 45 | 55 | -10 | 59 |
| 14 | Swansea CitySwansea | 46 | 15 | 12 | 19 | 59 | 65 | -6 | 57 |
| 15 | Watford | 46 | 13 | 17 | 16 | 61 | 61 | 0 | 56 |
| 16 | Sunderland | 46 | 16 | 8 | 22 | 52 | 54 | -2 | 56 |
| 17 | Stoke CityStoke | 46 | 15 | 11 | 20 | 49 | 60 | -11 | 56 |
| 18 | Queens Park RangersQPR | 46 | 15 | 11 | 20 | 47 | 58 | -11 | 56 |
| 19 | Blackburn RoversBlackburn | 46 | 14 | 11 | 21 | 60 | 74 | -14 | 53 |
| 20 | Sheffield WednesdaySheff Weds | 46 | 15 | 8 | 23 | 44 | 68 | -24 | 53 |
| 21 | Plymouth ArgylePlymouth | 46 | 13 | 12 | 21 | 59 | 70 | -11 | 51 |
| R | Birmingham CityBirmingham | 46 | 13 | 11 | 22 | 50 | 65 | -15 | 50 |
| R | Huddersfield TownHuddersfield | 46 | 9 | 18 | 19 | 48 | 77 | -29 | 45 |
| R | Rotherham UnitedRotherham | 46 | 5 | 12 | 29 | 37 | 89 | -52 | 27 |
| > Championship Full Table | |||||||||
