The pair, who have been rivals since they were 12 years old and are both in the early stages of comebacks, slugged it out for almost two-and-a-half half hours in a fluctuating match at the Pat Rafter Arena.
At different times, both players looked to have the match at their mercy but it took a final set tiebreak to split them after a tantalising warm-up to this month's Australian Open.
"What a match!" said Clijsters. "I think we set the bar pretty high for ourselves for the rest of the year.
"Justine played at a really high level for the whole tournament, so congratulations," she added.
Clijsters, who capped a fairytale comeback last year by winning the US Open for a second time, seemed to be cruising when she won the opening set and grabbed an early break in the second as Henin struggled with her serve, committing 11 double faults in the contest.
But Henin, playing her first tournament since retiring in early 2008, provided a stark reminder of the fighting qualities which has given her seven grand slam titles as she took the second set to square then raced to a 3-0 lead in the third.
But just when the 27-year-old Henin seemed to have seized the initiative and was heading towards victory, her delivery again let her down and she failed to serve out the match.
She then squandered two match points before the 26-year-old Clijsters eventually forced a tiebreak, which she won 8-6 to wrap up her 36th career title and her 11th victory in 23 clashes with Henin.
"It's just great to be back," said Henin. "I want to congratulate Kim, she's a great player and it was an amazing final."