The 18-carat gold Dent watch went under the hammer at the The Swan antiques centre in Tetsworth, Oxfordshire.
Churchill had gifted the timepiece to G Wallace Carter, on winning the first Liberal victory in the 1910 General Election.
Paul Hayes, from the antique centre, said the watch was still in "good working order".
The inscription on the 52mm diameter watch reads: "Presented to G. Wallace Carter in Recognition, The National Free Trade Services in Organizing The National Free Trade Lectures in the Memorable Year of Liberal Victory, 1910, Winston S. Churchill".
The auctioneers said the watch was chosen personally by Churchill, who was a patron of Dent, the watchmakers that also constructed Big Ben's clock.
It was auctioned off along with its original silk and velvet lined burgundy leather presentation case.
The watch reached its lower estimate, which was set at £12,000 to £15,000.
Churchill's first watch was also a Dent pocket watch, and he took a Dent wristwatch on campaign.
A pocket watch inscribed by Winston Churchill has been sold for £12,000 at auction.