"It was a great comeback," beamed Luke, "and taking the three points in the manner that we did has really lifted the spirit of the squad.
"We showed tremendous character to come back from 2-0 down. It was made even harder by the fact that we had actually played well up until the second goal, so it was a great effort from the players to keep their heads up and stay positive.
"In the end, I thought that we were the better side and thoroughly deserved the win."
Luke was also impressed with the performance of team-mate Sergei Rebrov, who scored his first League goal of the season for the Hammers against Watford, a goal which sealed victory for Alan Pardew's team.
"Sergei had a great game," admitted the former Manchester United winger, "but we have seen him play like that in training all season. He's a sharp, intelligent player who moves very well off the ball. It was just a case of putting it together out on the pitch, and he really did that against Watford.
"Hopefully, we'll see a lot more of that kind of form from Sergei this season."
As the Hammers prepare for a tough trip to promotion rivals Sunderland on Saturday, Luke was quick to insist that the Watford victory had breathed new confidence into Alan Pardew's squad.
"The lads have been looking really confident this week," he said, "and I think a lot of that has come off the back of the win against Watford. After back-to-back defeats it was very difficult to keep the confidence up, and there's nothing like a really hard-fought win to revive the squad's spirit.
"The trip to Sunderland will be very tough. They're a strong side who have been going well of late, and the Stadium of Light is never an easy place to go.
"Sunderland, like ourselves, are one of the favourites for promotion and they'll really want to put in a good performance against us.
"But if we can go there and play with the same kind of determination that we showed against Watford, then we'll have a great chance of coming away with a result.
"We're going into the game confident that we can win. If we do it will really put us into a good position going into the Christmas period."