Dimitrov, a former world number eight, had seen his ranking plummet to 40 last July, before he improved in the second half of the season to climb back up to 17.
"It's been pretty emotional past year so for me, this trophy means a lot," Dimitrov, whose last ATP title came at Queen's Club in 2014, said during the presentation.
"These 10 days out here for this tournament have been the most fun I've ever had on a tennis court, and off the court."
After surviving three break points during his first two service games, Dimitrov went on to break Nishikori and then won four consecutive games to close out the set.
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Yet the 27-year-old Nishikori, the 2014 U.S. Open runner-up, fought back in the second set, breaking Dimitrov twice to level the match.
The Japanese took a lengthy medical time-out before the deciding set, which seemed to hand the momentum back to Dimitrov.
The Bulgarian, who defeated top seed and defending champion Milos Raonic in the semi-final, got the decisive break in the eighth game to go 5-3 up and then served out the match for his fifth career title.
"This is my sixth year now and first time I was in the final. So I'm very happy this week," Nishikori said.
(Reporting by Sudipto Ganguly in Mumbai; editing by Toby Davis)
