Milner was on the verge of signing for Villa on the last day of the transfer window, but then-chairman Freddy Shepherd pulled the plug because Viduka could not agree terms for a transfer to St James' Park.
Milner told the audience: "This has capped an unusual season for me.
"The season began in Martin O'Neill's office at Villa Park where I got a call saying I was going back to Newcastle. And I'm happy I got that call because Newcastle is where I always wanted to play my football.
"Now I have this award, which is not really about me but the rest of the team, and a new contract and I could not be happier.
"I know we have had a couple of disappointing results but I am confident we will soon turn things round, starting with Sunday's game with Everton.
"As far as England is concerned, all I can do is to keep doing my best for Newcastle and let other people decide whether I can step up to the full international picture."
Milner saw his former United and Leeds United colleague Jonathan Woodgate named as the North East Player of the Year for 2006-7.
Sunderland were named as the Team of the Year for gaining promotion to the Premier League.
Alan Shearer judged the goal of the season and decided that this should go to Eifion Williams for his great effort for Hartlepool in the derby match with Darlington.
Oba Martins was second for the piledriver against Spurs at White Hart Lane, while Milner's goal against Manchester United at St James' Park on New Year Day was third.