It was the second victory in consecutive weeks for former major champion Tavatanakit, who won the Saudi International on the Ladies European Tour seven days ago.
Tavatanakit finished on 21-under 267 after a round of 67 to withstand a charge from the gutsy world number 91 Valenzuela, who fired six birdies on the back nine on her way to a nine-under par 63.
Tavatanakit coolly chipped her third shot at the par-five 18th to a few inches and burst into tears after she tapped home the winning putt at Siam Country Club, Pattaya, after a titanic struggle on the back nine.
"It was a lot of emotions," admitted Tavatanakit. "It was joy. I felt so proud.
"I had so much pressure on me today just playing in front of the home crowd, and I was able to do that," she said.
"I just felt like, OK, like I need to make up and down to win the match," she said. "Soon as it stopped about couple inches away from the hole, I was like, yep, I won."
South Korea's Kim Sei-young and Choi Hye-jin tied for third, two shots further adrift, at the $1.7 million tournament.
Valenzuela held the clubhouse lead Sunday after she finished on 20-under 268 and Tavatanakit, who had started the day three strokes clear of the field, dropped her only shot of the round at the par-four 15th.
But the Thai world number 43 composed herself to birdie the 16th and 18th and lift her second career LPGA title after the 2021 ANA Inspiration, one of five women's majors.
"I'm honestly speechless right now," said Tavatanakit.
"It's a dream come true to win here. It was unbelievable. I still couldn't believe I did that today."
Tavatanakit is only the second homegrown player to win the LPGA Thailand after Ariya Jutanugarn in 2021.
'It's pretty surreal'
"I was outside the ropes (watching) at one point in my life and now I'm inside, get to play with all these amazing girls," she said.
"They're the best in the world. To be able to close it out is pretty surreal right now."
Valenzuela stormed out of the gates with a birdie at the first and an eagle two at the par-four fifth before charging into the lead briefly with a remarkable run of six birdies in her final eight holes.
"I'm just really just proud of myself. I just fought really hard," said Valenzuela, who started the day five shots behind Tavatanakit.
"I gave everything I had. I did not leave anything off the table. Dug in deep but also stayed extremely calm. I want to be in this position more often, and I hope I'll put myself in this position next time."
