The arts and textiles teacher from the Alperton Community College of Brent, an inner-city school in London, was among 10 finalists from around the globe for the annual award. Thirty thousand candidates were in the running.
Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum and British Prime Minister Theresa May were among the first to congratulate her.
He said teaching "is the greatest job" ever, and described teachers as "stars".
May, in a video message broadcast at the gala event, said: "Being a great teacher requires resilience, ingenuity, and a generous heart. These are the qualities that you share with your students everyday.
"So thank you for all you have done and continue to do."
Formula One champion Lewis Hamilton raced to the venue to deliver the trophy while South African comedian Trevor Noah hosted the event which included a performance by Oscar-winning actress and Grammy award winning singer Jennifer Hudson.
Brent, where Zafirakou teaches, is considered an ethnically diverse and disadvantaged area and many of her students come from impoverished homes.
"But throughout the school and on the streets she is driving change" working "closely with the police to identify potential issues and (gang) recruiters."
She redesigned the school's curriculum "to resonate with an ethnically diverse student body" and learnt the basics of some of the 35 languages spoken at the school to communicate with parents and students.
Zafirakou also "reworked the school's timetable to allow girls-only sport, important in a conservative community. The result? A cup-winning girls' cricket team," the statement said.
Her hard work paid and placed Alperton Community College "in the top five percent in England and Wales for improving pupils' achievement".
The Dubai-based Varkey Foundation organised the event, the fourth time it has handed out the prize for best teacher.
The winner will walk away with $1 million which will be paid in equal instalments over 10 years on one condition she continues teaching for at least five years.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)