The players finished regulation tied at 16-under-par 272 and returned to the 18th tee to begin the playoff. Both players split the fairway with their drives and Hensby knocked his approach 15 feet from the hole.
Ridings hit a pitching wedge from 138 yards out and found the bottom of the cup to seal his first career victory.
'I feel like I won the lottery except for the fact that I got gypped out of winning 70 million,' said the 27-year-old Oklahoma native, who pocketed $76,500 for the win. 'This is unbelievable. I couldn't have dreamed it up any better.'
Ridings moved from 52nd to 14th on the official Buy.Com Tour money list.
Neither player finished regulation on a high note. Ridings owned a one-shot lead but missed a four-foot bogey putt on the 17th to fall one behind Hensby. Hensby, who played in the group behind Ridings, also stumbled at 17 and took a bogey, knotting the players at 16-under par.
'After making double bogey I was just lucky to be in the playoff,' said Ridings, who carded a 3-under 69 Sunday. 'That was really disheartening at the time. But the finish was a beautiful thing.'
After Ridings parred the 18th, Hensby had a good look at birdie on Midland Country Club's final hole. Hensby's 12-footer slid past the hole and it was back to 18 for the playoff.
'Under the pressure to win, I hit a perfect putt,' said Hensby, 31, who closed with a one-under 71. 'Then in the playoff I hit a decent shot on the green and would have had a chance to win if Tag wouldn't have holed his shot to win. But those things happen from time to time.'
Hensby, an Australian, has two wins on the Buy.Com Tour. He captured the 1998 Fort Smith Classic and 2000 Carolina Classic.
Brian Claar (68) finished alone in third place at 14-under par. Joe Daley (67), Ken Green (68), Gene Sauers (69) and Omar Uresti (72) tied for fourth at minus 13.
Brent Winston, who shared the third round lead with Hensby, struggled on Sunday with a 3-over 75. He tied for eighth with Mike Standly and Wes Short at 12-under-par 276.
Full-field scores from Permian Basin Open