Hull came into the rearranged fixture in third place, having won all four Championship matches since the originally scheduled clash was postponed just 18 minutes before kick-off due to unsafe areas around the pitch.
But they were unable to extend that winning run as Watford produced a battling display for caretaker boss Charlie Daniels.
Daniels stepped up from his role as under-21s lead coach, assisted by Adrian Mariappa and Dan Gosling, after Javi Gracia resigned last weekend, just three months into his second spell at the club.
Hull are now four points behind second-placed Middlesbrough and leaders Coventry in the fight for automatic promotion via a top-two finish.
Sheffield United maintained their impressive home form, coming from behind to beat Oxford 3-1 and move seven points clear of the relegation zone.
Sydie Peck cancelled out Myles Peart-Harris' early opener for Oxford before the break, and second-half goals from Andre Brooks and Chiedozie Ogbene sealed the Blades' sixth win in their last seven league games at Bramall Lane.
Oxford remain second bottom and sit five points from safety.
Eiran Cashin's first goal for managerless Blackburn clinched a 1-0 win over bottom-of-the-table Sheffield Wednesday at Ewood Park.
After a turbulent few days that saw Valerien Ismael depart, on-loan Brighton defender Cashin provided much-needed respite by converting from close range in the 12th minute.
That was enough to ensure Rovers edged a game originally abandoned back in December, with the hosts leading.
The victory lifted them out of the relegation zone at the expense of West Bromwich Albion.