Midfielder Diame settled a tense Championship play-off final with a stunning strike from the edge of the area, sinking Sheffield Wednesday 1-0.
City boss Bruce admitted he feared his side would blow their chance after they missed a hatful of opportunities to break the deadlock at Wembley.
Diame himself hit a post, Andy Robertson missed a sitter from eight yards, Abel Hernandez’s header was cleared off the line while Owls goalkeeper Keiren Westwood made a succession of fine saves.
But Westwood was beaten in the 72nd minute when Diame took aim from 20 yards and buried his golden shot - worth an estimated £170million - into the top corner.
“I thought we’d had too many good chances, and on big occasions you can’t keep missing them,” admitted Bruce.
“When Robbo (Robertson) `knocked that one over the bar I thought ‘it’s not going to be our day’.
“But Mo produced a bit of magic for us. His quality has got us back into the Premier League. It was a wonder goal which would grace any cup final.”
Bruce has earned himself a place in the history books as the first manager to win promotion to the Premier League four times, twice with Birmingham and now twice in three years with Hull.
It is an achievement which seemed a long way away when Bruce offered his resignation following last season’s relegation.
“I offered it because we had failed, and because I knew how difficult a time it would be,” he added.
“But thankfully our owner didn’t want me to go. So in that respect it’s fantastic and I’m very pleased with the decision.
“I think I’ve done enough over 800 games, and the last four times I’ve been in the Championship I’ve managed to get out of it. But it’s not about me, it’s about the club.
“Now if we do things properly we can improve the squad no end. We’ve stayed up before. Watford have done it, look at Swansea. We have to replicate them. We haven’t gone to work yet and we have a month before we start again.”
It was a disappointing end to a season which has exceeded all expectations for Wednesday, whose Portuguese coach Carlos Carvalhal will not be joining compatriot Jose Mourinho in the Premier League just yet.
Carvalhal said: “To talk about this game we must talk about the season we had. We achieved the play-offs with very hard work.
“In the final we played a strong team who were relegated from the Premier League and who have the same coach and have been together a long time.
“I think Hull deserved to win, they were better than us. We did our best. I think we have woken the giant and Sheffield Wednesday will be more respected in the future.”