With his first Premier League goal from open play this season, the Hornets captain settled a slog of a contest and moved the hosts six points clear of the bottom three.
Everton had conceded nine goals in their previous two away games, and Watford had kept only one clean sheet in 14 league matches, but the two defences were well on top in the first half.
Watford stopper Orestis Karnezis was forced to tip the ball onto the post from a hopeful Oumar Niasse drive across goal, but Jordan Pickford at the other end was unworked by ugly long-range strikes from Abdoulaye Doucoure and Etienne Capoue.
The game opened up slightly in the second period as both sides had headed opportunities, with Michael Keane nodding wide from Idrissa Gueye's cross and Deeney directing his effort straight at Pickford.
Femenia wasted a great opening when he ignored the unmarked Deeney in the middle to shoot straight at Pickford, whose clearance had hit the Watford captain and fell kindly to the Spaniard outside the box.
However, Deeney was picked out a minute later when the two substitutes combined to find their skipper in generous space, and he quickly turned to thump an unstoppable shot beyond Pickford from 15 yards.
Everton failed to find a response, only threatening an equaliser in stoppage time when Pickford came up for a corner and won a header which opposite number Karnezis jumped on just ahead of Cenk Tosun.
After climbing into the top half of the table, the Hornets may be looking up at Everton, who are now only one point ahead of today's opponents after falling to a fifth successive away defeat.
WATFORD (4-5-1): Karnezis; Janmaat, Mariappa, Prodl, Holebas; Doucoure, Capoue; Deulofeu (Carrillo, 63'), Pereyra (Femenia, 56'), Richarlison (Okaka, 56'); Deeney
EVERTON (4-3-3): Pickford; Kenny, Williams, Keane, Martina; Davies, Gueye, Rooney (Calvert-Lewin, 82'); Walcott, Sigurdsson (Bolasie, 82'), Niasse (Tosun, 56')