Germany's Sideris Tasiadis was second and the defending Olympic champion, Slovakia's Michal Martikan, took third place at Lee Valley.
Estanguet wrapped the French flag around his shoulders as Tasiadis crossed the finish line, narrowly missing out on top spot.
He received his gold medal in front of thousands of spectators, who had stayed in the stands to cheer him and blow their vuvuzelas.
He was then joined in the centre of the podium by the 22-year-old Tasiadis from Augsburg in Germany and 33-year-old Martikan from Liptovsky Mikulas, who now has five Olympic medals, having previously won two golds and two silvers.
Estanguet ruled out competing at Rio 2016 after clinching his third gold medal. He was pleased to be back on top of the podium again after he finished ninth at Beijing 2008.
He said: 'For me this is great because I have worked so much during the last four years to do this kind of race, so I am really satisfied to come back after Beijing.
'I had the best balance between the speed and precision. It's really hard on this course to find this kind of balance and two years ago during the qualification I did not have this balance but today was much better.
'It was not easy to compete after Martikan because I knew he was really fast and I heard the audience crying so I was sure he did a really good time. I tried to stay focused on my line and stay at my best level.
'It was really open. There were five or six paddlers who could win today.' Asked whether he would compete in Rio, he said: 'No, no. I don't think so.'