Former World Champion Dott had beaten the likes of Ronnie O'Sullivan, John Higgins and Stephen Hendry to reach the final, but could not stop inspired Leicester cueman Woollaston winning his first professional title.
The 24-year-old is a former European Under-19 Champion but has never been past the last 32 of a full ranking event.
Woollaston won the first frame of the final with a break of 70, then in the second Larkhall's Dott got the snooker he needed on the last red and cleared for 1-1. Another tight frame went the way of Dott, but Woollaston dominated the last three frames, taking them with top runs of 42, 43 and 50.
"I think this shows the strength in depth on the Tour, no result surprises me these days," said Woollaston after collecting a cheque for £10,000 and receiving 2,000 ranking points. "Hopefully I am starting to fulfil my potential now. I'm guaranteed to be in the PTC finals now and my target for the season is to get into the top 48 and qualify for a few venues.
"I didn't play a bad match in the tournament, the only time I was worried was in the quarter-finals when I was 2-0 down to Alan McManus. I came back to win that 4-3, and in the final against Graeme I did well to recover from 2-1 down."
Woollaston believes that his improved form is a result of his settled personal life as he recently married Tatiana, a referee from Belarus, and she is moving to England permanently tomorrow.
"I'll see her for the first time in two months, and that gave me extra inspiration today because I felt as if I had nothing to lose," he said. "I wanted to win it for her. We've not had a honeymoon yet so the money will help with that."
The Players Tour Championship is a series of 12 short events, with the top 24 on the final Order of Merit to qualify for the Grand Finals, providing they play in at least three in the UK and three in Europe. The next event is PTC4, the Paul Hunter Classic, next week in Furth, Germany. All PTC events are streamed on www.liveworldsnooker.tv
Results (last 16 onwards)
Ben Woollaston 4-0 Ken Doherty
Alan McManus 4-1 Joe Jogia
Anthony McGill 4-1 Michael Holt
Stephen Lee 4-1 Stephen Maguire
Marcus Campbell 4-2 Mark Selby
Barry Hawkins 4-1 Xiao Guodong
Jamie Jones 4-3 Matthew Selt
Graeme Dott 4-2 John Higgins
Ben Woollaston 4-3 Alan McManus
Anthony McGill 4-2 Stephen Lee
Marcus Campbell 0-4 Barry Hawkins
Jamie Jones 0-4 Graeme Dott
Ben Woollaston 4-0 Anthony McGill
Barry Hawkins 1-4 Graeme Dott
Graeme Dott 2-4 Ben Woollaston
Ball by ball scoring and results from tournaments