The Tottenham winger helped to set up the Three Lions’ opener at Wembley with a run down the right before Wayne Rooney converted in the 48th minute.
Branko Boskovic turned into his own net on the hour-mark to make it 2-0 to the hosts but Dejan Damjanovic quickly replied to keep the visitors in the game.
However, Townsend’s run and swerving shot sealed victory before Daniel Sturridge’s late penalty wrapped up a vital win and leaves England in control of their World Cup destiny.
“We agonised over it [selecting Townsend], we had plenty of discussions and argued things back and forth because we had so many players we could choose from,” said Hodgson.
“To leave people like Jack Wilshere and James Milner out for an important game like this wasn’t an easy decision.
“Of course we’re glad it worked out well for us. Andros got the man-of-the-match award and must be delighted with his evening’s work.”
Hodgson’s side will book their place at next summer’s tournament in Brazil with victory over Poland at Wembley on Tuesday night.
And the England boss was satisfied with the overall display in a wet and windy north London.
“I think we were very dominant in the first half but it wasn’t easy to find a way past a well-organised Montenegro team,” he continued.
“We thought if we could just up the tempo a little bit around the penalty area and keep making those incisive runs the chances would come.
“Luckily they did and we scored. The 2-1 was a cold shower for us because we’d had about three chances to go 3-0 up but luckily Townsend stepped in and got a good goal for us.”
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