The 28-year-old hooker was adjudged by fellow players to have made the biggest impact in this season's competition.
Hull FC boss Lee Radford was named coach of the year after leading them to victory in the Challenge Cup final against Warrington and the play-off semi-finals, where they lost to Wigan.
Wakefield winger Tom Johnstone picked up the young player of the year award.
Houghton beat Hull FC captain Gareth Ellis, who came second, and Castleford Tigers winger and this season's top try-scorer Denny Solomona, placed third.
"I'm honoured, I'm proud. To beat the legend Gareth Ellis is special," Houghton said.
"To walk out for your hometown club in front of 10,000 special people, it's humbling. I'm honoured that I've been able to take to the field and live my dream."
The Man of Steel is chosen by a poll of every Super League player and the award is named after ex-St Helens, Hull and Wakefield full-back Prescott, who was diagnosed with a rare form of stomach cancer in 2006 and died in 2013 at the age of 39.
Prescott raised more than £500,000 for charitable causes before his death.
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Recent Man of Steel winners:
Danny Houghton has become the first Hull FC player to win the Super League Steve Prescott Man of Steel award.