The writer, whose novels about the life of King Henry VIII's adviser Thomas Cromwell have been critical and commercial hits, already has a CBE.
She said: "I'm delighted to receive this honour. It's given for 'services to literature,' but I see it not so much as a reward for the past, more as encouragement for the future. It means a great deal to have my efforts recognised, especially as I feel I've come to a new phase in my creative life. I hope it will please the many people who have helped me."
Success has come late to the 61-year-old novelist, but she has more than made up for it by collecting a haul of literary honours including twice winning the Man Booker Prize.
She is working on the final book in her Cromwell trilogy and the first two - Wolf Hall and Bring Up The Bodies - are currently on stage in London and being made into a BBC drama.
The Derbyshire-born writer studied law at the London School of Economics and Sheffield University before becoming a social worker.
Her writing was inspired by the end of her parents' marriage and personal illness.
In an interview with Mslexia, she said: "In my 20s I was in constant pain from undiagnosed endometriosis. With no prospect of a cure, I decided I needed a career - writing - that could accommodate being ill."