'I wouldn't still be teeing it up in tour events if I didn't think I could win,' said Daly, who earned his fifth career victory on the PGA Tour. 'I wish it would have come a little easier.'
Daly, who won the British Open in a playoff nine years ago, finished regulation at 10-under-par 278 along with Chris Riley and Luke Donald at Torrey Pines.
The trio headed back to the par-5 18th to begin the extra session and Daly let it rip off the tee with a perfect drive down the middle of the fairway. Riley followed with an equally solid drive while Donald missed the fairway in the right rough off the tee.
Donald, an Englishman who titled at the 2002 Southern Farm Bureau Classic, punched his second out of the rough and Riley followed, advancing his second shot down the fairway.
The anxious gallery at the 18th expected nothing less from Daly as he took a 3-wood out of his bag and blasted his approach through the right side of the putting surface and into a greenside bunker.
Daly wasn't home free yet, however, as Donald played a tremendous third shot that stopped within six feet of the hole. Riley followed and watched as his third shot trickled down a ridge and came to rest five feet from the cup.
Daly, who had been brilliant out of the sand all week, lifted his third out of the bunker and cheered his ball down the crest. Daly's cheers, along with those of the gallery, increased emphatically until the ball stopped within inches of the hole.
He wasted no time in tapping in for a birdie, putting the pressure squarely on his competitors. Donald putted first and missed left and while Riley's putt was on line, it lipped out granting the victory to Daly.
'A lot of emotion and kind of a relief that I finally won again,' said Daly, who took home $864,000 for the victory. 'It's just great. It's a wonderful feeling to win again.'
Daly used an eagle on the 18th on Saturday to take the lead heading into the final round and he had plenty of work ahead of him on Sunday.
'I just went out like I usually do,' said Daly, who struggled to a 75. 'I really didn't worry so much.'
At the par-3 third, Daly knocked his tee shot over the green and into a hazard. An unlucky second shot left Daly on the green in three where he two-putted for a double-bogey.
He fell behind Stewart Cink momentarily but recovered with a birdie at the sixth. Daly then bogeyed the seventh but managed to hold the lead as Cink, and nearly everyone else on the South Course, experienced troubles.
At the par-5 ninth, Daly played his second shot right of the fairway. With a row of trees between him and the green, Daly used a slim opening to skip his third shot to 12 feet. He missed the birdie putt by inches, but the play out of the trees was the break Daly needed.
Daly hit his third out of a bunker to 15 feet at the 12th and drained the putt to save par. The 37-year-old found the sand again at the par-3 16th and this time played his third to two feet for another par.
With Donald and Riley already in the clubhouse at minus-10, Daly chose to lay up at the par-5 18th in regulation and settled for par before heading to the playoff where a victory was only another bunker shot away.
'It was a battle on the golf course today,' said Daly. 'Somehow I know that I got it done and I'm just so happy.'
Donald moved into contention with a birdie at the 11th and ran home a 12-foot putt for a birdie at the 13th to match Daly at 11 under.
The 26-year-old faltered with back-to-back bogeys from the 14th but he drained a 10-foot birdie putt from the fringe at the 18th to complete a round of 69.
Riley, who was seeking his first title since the 2002 Reno-Tahoe Open, also used a birdie at the last to secure a spot in the extra session after a 69 of his own.
Phil Mickelson, a three-time winner of this event, posted a 5-under 67 to join Thomas Bjorn, Shigeki Maruyama, Jesper Parnevik, Duffy Waldorf and Bo Van Pelt in a tie for fourth at 9-under-par 279.
Tiger Woods continued to struggle off the tee in the final round. The top player in the game, who won this event last year, bogeyed the opening hole but responded with four birdies on the front nine to reach 8 under.
Woods moved to 9 under with a birdie at the 10th but found a bunker off the tee at the par-4 12th en route to a bogey.
He dropped another shot at the 15th but closed with a positive after his third shot to the 18th stopped within three feet of the hole for a birdie.
'I feel like I'm playing well,' said Woods, who carded a 69 in the final round. 'I felt so good starting out. I hit so many good golf shots starting out, I wish I would have kept it going.'
Woods joined Jay Haas, Billy Mayfair, Brandt Jobe, Tom Pernice, Jr., and Cink at 8-under-par 280.