The 26-year-old Team Movistar rider's effort on Saturday improved the mark of 52.491km set by Dennis in February by 446 metres.
"I wish everyone hadn't told me it was going to be so hard," said a tearful Dowsett afterwards.
"I was expecting 'horrific' and it was just 'terrible'!
"I think I had more in me, it's difficult to know. The first 30 minutes was easy, at least compared to what I expected. I just had to stay disciplined and, sure enough, the last 10 minutes were a bit 'grippy'."
Dowsett's ride was visualised alongside that of Dennis on the Velodrome scoreboard, meaning that the crowd could see the Essex-based rider gaining ground on his virtual rival in the closing stages.
Dowsett eventually 'caught up' with Dennis on lap 179 of the near-212 he eventually completed and in the closing 10 minutes he raised his pace considerably to surge beyond the old mark.
"The last five minutes was all the crowd inspiring me, with the noise they were making," Dowsett said.
It is the fourth time the record has been broken since September 2014, and it may not stand for long.
Dowsett's fellow Briton Bradley Wiggins, the 2012 Tour de France winner and four-time Olympic gold-medallist, is scheduled to make an attempt on the record in London on June 7.
Dowsett hit the headlines in 2013 when he won one stage at the Giro d'Italia, as well as a third consecutive British time trial title.
Despite being diagnosed with haemophilia, which impairs the body's ability to clot blood, he had dreamed of breaking the world hour record from an early age.