Dean finished in a time of one minute and 44.22 seconds, ahead of his British compatriot Duncan Scott who collected silver at the Tokyo Aquatics Centre.
His mother Jacquie Hughes spoke of the moment she watched her son win the gold medal.
She told the BBC’s Today programme: “I looked around at my other children and people in my garden in the early hours this morning; and they were all crying. I was just in shock.
“We were all jumping around like whirling dervishes.
“Tom says he feels like he’s in a dream and I think I’m with him in the same dream.”
However, Dean had doubts about even making it to the Games, after he contracted coronavirus for a second time at the start of this year; spending up to seven weeks out.
After testing positive again in January, the 21-year-old said his symptoms were much more severe; telling the BBC he could not walk up the stairs “without coughing and wheezing”.
He said: “When I was sitting in my flat in isolation, Olympic gold seemed like a million miles off. But here we are.”
Ms Hughes also told Sky News that her son’s life has “changed forever”; after he became the first British man to win an Olympic freestyle title in 113 years.
She said: “Before the race he was very quiet, contained and internal and very methodical, he knew what he had to do, he just wanted to get on with it.
“After the race he said: ‘Mum I just feel like I’m in a dream I knew I could win it but none of it’s sunk in.’”
Ms Hughes added: “I just said to him, ‘Tom my heart is bursting’; and it’s not just because you have won a gold medal it’s the way he conducts himself, the way he picks himself up after disappointment.
“He’s had two bouts of Covid this year, it’s really knocked his plan off. I’m just so proud of the way he approaches it.”
Footage on the Team GB Twitter account showed Dean’s family celebrating in Maidenhead as they watched the event live.
A large crowd could be heard cheering him on before jubilant friends and family embraced each other.
Both Dean and Scott are expected to compete in the men’s 4x200m freestyle relay heats on Tuesday.
The victory marks Team GB’s fourth gold medal of this year’s Games; following a spate of victories on Monday.