Just over a week after winning the Tour, Wiggins won a gold medal in the Olympic time trial, one of 65 medals collected by the British team who finished third in the medals table behind the United States and China.
"I never ever imagined that I would ever become a knight, so it's an incredible honour," said Wiggins. "But there's a slight element of disbelief and it will take a while to sink in."
"(The French) will love it. It will add to the myth. I will have to get a bowler hat as well. They are fascinated slightly with our Britishness, our culture and things like knighthoods, so it is a nice thing to have."
Ben Ainslie, the most decorated yachtsman in Olympic history with gold medals in four consecutive Games, is also knighted as are David Brailsford, the performance director of British cycling and David Tanner, the performance director of British rowing. All four can now be addressed as "Sir".
Ainslie said: "This is an incredible honour. I couldn't have achieved this honour without the support of all the people who have helped me throughout my career and so I hope they can also take some pride in this moment."
Cyclist Sarah Storey, who won four gold medals at the Paralympics, has been made a Dame Commander of the Order of the British Empire.
She said: "I can't believe the number of times we've said this year, 'Oh, can 2012 possibly get any better?'. We feel so fortunate that 2012 will always stand out as being the most incredible year."
London Olympic gold medallists Jessica Ennis (athletics), Mo Farah (athletics), Katherine Grainger (rowing), Victoria Pendleton (cycling) and David Weir (wheelchair athlete) were named Commanders of the Order of the British Empire (CBE).
Sebastian Coe, the chairman of the London organising committee, is awarded a Companion of Honour (CH) on the main honours' list.
There were also awards for Olympic men's tennis champion and US Open winner Andy Murray (OBE) and Olympic women's boxing gold medallist Nicola Adams (MBE) among others.
OLYMPIC AND PARALYMPIC ATHLETES IN NEW YEAR HONOURS
Knighthood: Ben Ainslie (sailing); Bradley Wiggins (cycling)
Damehood: Sarah Storey (cycling).
CBE: Jessica Ennis (athletics), Mo Farah (athletics), Katherine Grainger (rowing), Victoria Pendleton (cycling), David Weir (athletics)
OBE: Sophie Christiansen (equestrian), Charlotte Dujardin (equestrian), Jason Kenny (cycling), Andy Murray (tennis), Ellie Simmonds (swimming), Laura Trott (cycling)
MBE: Nicola Adams (boxing), Jessica-Jane Applegate (swimming), Tim Baillie (canoeing), Natasha Baker (equestrian), Laura Bechtolsheimer (equestrian), Scott Brash (equestrian), Danielle Brown (archery), Alistair Brownlee (triathlon), Steven Burke (cycling), Mickey Bushell (athletics), Luke Campbell (boxing), Peter Charles (equestrian), Hannah Cockroft (athletics), Mark Colbourne (cycling), Katherine Copeland (rowing), Josef Craig (swimming), Deborah Criddle (equestrian), Aled Davies (athletics), Neil Fachie (cycling), Jonathan Fox (swimming), Heather Frederiksen (swimming), Helen Glover (rowing), Alex Gregory (rowing), Carl Hester (equestrian), Philip Hindes (cycling), Sophie Hosking (rowing), Oliver Hynd (swimming), Jade Jones (taekwondo), Anthony Joshua (boxing), Dani King (cycling), Mary King (equestrian), Helena Lucas (sailing), Craig MacLean (cycling), Ben Maher (equestrian), Ed McKeever (canoeing), Nigel Murray (boccia), Jonnie Peacock (athletics), Josie Pearson (athletics), Pam Relph (rowing), Naomi Riches (rowing), James Roe (rowing), Joanna Rowsell (cycling), Greg Rutherford (athletics), David Smith (rowing), Louis Smith (gymnastics), Heather Stanning (rowing), Etienne Stott (canoeing), Lily van den Broecke (rowing), Anna Watkins (rowing), Sophie Wells (equestrian), Richard Whitehead (athletics), Peter Wilson (shooting)