Jones, 19, had produced a late rally to land her trademark head-kick and stun world number one Tseng Li-Cheng of Chinese Taipei 10-6 in the semi-final.
However, the opening against Hou - who had beaten Jones in last year's World Championships final - was tense, as each fighter tested their range during a scoreless first two minutes.
A low blow from the Chinese fighter accrued a second penalty which resulted in a point for Jones towards the end of the second round, and another shot to the body on the buzzer made it 2-0.
The Briton continued to go on the offensive and opened up a 5-1 lead heading into the final 30 seconds, closing out a stunning 6-4 victory.
Jones said she owed her success to her coach.
'My coach Paul Green is a legend. Without him I wouldn't be nowhere near where I was today,' she said.
'To win the Olympic Games gold is obviously special but for my family and friends to be here ... to perform has been amazing.'
Tseng went on to claim bronze after coming through against Finland's Suvi Mikkonen, while Frenchwoman Marlene Harnois saw off Mayu Hamada of Japan for the other bronze medal.