The 55-year-old X-Raid Mini JCW driver, nicknamed "Mr Dakar" for his unprecedented success, first won the endurance event on a motorcycle in 1991 and switched to cars after five more wins on two wheels.
"It’s still the same emotion... there are no easy victories on the Dakar," Peterhansel said after a triumph that also made him the first driver to win the rally on three continents.
Argentine Kevin Benavides, riding a Honda, became the first South American to win the motorcycle title after the 12th and final stage that ended in Jeddah.
The annual rally started in 1978 as a race from Paris to the Senegalese capital, Dakar, but moved from Africa for safety reasons in 2009. It is now held entirely in Saudi Arabia after a stint in South America.
This year was the 43rd staging of the event and Australian motorsport fans were able to watch all the action via SBS and SBS On Demand.
The finish, however, was clouded by news of the death of French amateur rider Pierre Cherpin who had been in an induced coma since he crashed on the seventh stage.
The 52-year-old amateur was the first fatality of this year's event. Two motorcycle riders died on the Dakar last January.
Peterhansel, who had led since the second stage but won only one of the 12, finished 14 minutes and 51 seconds ahead of Qatar's Nasser Al-Attiyah, a three-time Dakar winner, in a Toyota.
Spaniard Carlos Sainz, the defending champion and Peterhansel's teammate, won the final stage and finished third overall.
"The difference was probably that Nasser made the first mistake on the prologue. He won the prologue and I think it was his first mistake. He probably lost the Dakar because he wanted to win the prologue," Peterhansel said.
By winning the prologue, Al-Attiyah had to go first on stage one and open the road for those behind. He lost 12 minutes.
In the motorcycle class, 2020 champion Ricky Brabec of the United States won the final stage to finish runner-up to teammate Benavides and complete Honda's first one-two Dakar finish since 1987.
Britain's Sam Sunderland, the 2017 winner, finished third overall for KTM.
"On stage five I was worried because I crashed so fast and hit my head and my ankle and felt a lot of pain. On that day, I said, 'maybe the Dakar is finished for me'. But I continued pushing," Benavides said.
"I still have some pain, but at the moment I am more happy than in pain."
Manuel Andujar made it an Argentine double with victory in the quadbike class.
Russian Dmitry Sotnikov took his first title in the truck category, won by the Kamaz team for the fifth year in a row.
