'The Nuke' was still 17 when he received a £500,000 cheque in January after becoming the youngest champion, with the winner's share of the prize fund unchanged since 2020.
Littler's emergence, with the teenager having also reached the final last year, has captured the imagination of the British public and done much to increase the sport's popularity.
The overall prize fund for the World Championships has also been doubled, to £5 million, with the competition expanding to a 128-player field, up from 96.
"The £1 million prize for the world champion reflects darts' standing as one of the most exciting and in-demand sports in the world," PDC chief Matt Porter said in a statement.
"However, the increased prize funds announced today demonstrate our commitment to growing earning potential for players at all levels within the PDC system."
The PDC has boosted prize funds on next year's professional circuit by £7 million - to a total of £25 million, with the Premier League total pot up to £1.25 million and a £1 million prize fund on offer at both the World Matchplay and Grand Slam.
Along with increases in prize money at competitions on the ProTour, the PDC also raised prize funds for Challenge Tour, Development Tour and Women's Series events.