After fighting back tears on the podium, he said: 'It's unbelievable, I'm speechless for once.
To be in the sport all this time and win this just caps it. You always dream about this but when it actually happens it is real life.
'The horse was amazing today and he's been really unlucky the last few days...but I did it the other way round in London and it didn't pay off.
'Justice has been done for him today and he deserves it. He's been incredible. It's been a hard, hard road because he hasn't been sound since the last competition he won in 2013, so today was a good day to win.
'Everybody has been working to get this horse back on the road and it's amazing.
'It's been tough the last three years but I knew if we got him right he's capable of doing it.
'He's the best horse I've ever seen. He's an incredible horse...he knows the day and when it's really important and you can put pressure on him and he takes it.'
He added: 'I don't think they'll be an eighth Olympic Games...when he retires, I'll stop to. And I don't think he'll make another one, and I'll be too old.'
Peder Fredricson of Sweden won silver, and Canada's Eric Lamaze took bronze.
His success means Great Britain's equestrian team finished their Rio campaign with two gold medals - Skelton and dressage star Charlotte Dujardin - as well as a silver for the dressage team.
Skelton's gold is even more remarkable given the severe injuries he has overcome including broken shoulders, broken legs and having a hip replaced.
But by far the worst came just before the Sydney Games when he broke his neck in a bad fall.
He said he could hear the crack inside his head when it struck the ground.
When he was airlifted to hospital, he spent three days fighting for his life.
He was warned that if he fell off a horse again or suffered whiplash, it might be fatal.
So it was no surprise that he called his autobiography Only Falls and Horses.
But there was another reason. He is such a fan of Only Fools and Horses that his sons, Daniel and Harry, presented him with a vintage Robin Reliant.
'It's all I watch on TV,' said Skelton. 'I could repeat every word. I took her for a drive on Christmas Day and everybody was flashing their lights and hooting their horns at me.
Reluctantly, he retired sport in 2001, but to the amazement of many, the following year he was told by a German specialist that the bones in his neck had healed beyond expectations so he returned to the saddle and competing at the top of the sport.
'I was off for one-and-a-half years wondering what I was going to do with my life,' he said. 'But it did get better.'
The showjumping legend returned to the Olympic fold in Athens, where he finished 10th, and then London where he came fifth.
Britain's record-breaking Olympian has been a mainstay of the British showjumping team for more than four decades, since 1974 when he won a silver medal at the Junior European Championships.
He has held the British high-jump record since 1978, when he cleared 7ft 7in aboard Lastic and has won 19 medals for his country.
At London 2012, he finally won gold in the team jumping event - Britain's first in 60 years - along with Ben Maher, Scott Brash and Pete Charles.
He was so keen to get the medal he went to jump on the podium before the medal ceremony had begun, and had to be pulled back by team-mates.
Skelton - whose two sons are establishing fine reputations in National Hunt racing - had a reputation as a hell-raiser when he was younger.
He was knocked unconscious by showjumper Harvey Smith in a brawl as a 21-year-old and his first marriage ended with his wife locking him out of their Mauritius hotel room and throwing his clothes into the Indian Ocean.
A protégé of respected trainer Ted Edgar from the age of 15, Skelton always struggled to accept his employer's patronage, feeling the older man looked down on him.
That resentment finally spilt over into violence in a in a Gothenburg hotel.
'I lashed out and punched him twice, a left and a right,' Skelton wrote in his autobiography.
'We ended up brawling on the floor in reception and for good measure I gave him a kick while we were down. At that point the hotel staff came and threw me out.'
'I've mellowed a bit', he said in a recent newspaper interview referring to his colourful past.
This will be his last Olympic Games, having first competed at Seoul in 1988.
'I won't be going to Tokyo - I don't like Japanese food anyway. I'll pack up probably when Big Star retires from the top.
'There's no chance of getting a better one than Big Star.'
