Mr Hudspeth won the backing of independent councillors Mark Gray and Les Sibley to gain enough votes to avoid the need to form a 'coalition cabinet'.
A vote at County Hall in Oxford on Tuesday confirmed his leadership, allowing him to appoint a new cabinet.
Thirty-three councillors voted in favour of Mr Hudspeth staying on as leader, 15 voted against and 15 abstained.
Benson and Cholsey councillor Mark Gray was rewarded with a place in the cabinet while Bicester West councillor Mr Sibley remained on the backbenches.
The accusation of 'pork-barrel politics' from Liz Brighouse, leader of the Labour group, was brushed aside.
She had wanted a return to a committee system to give all councillors a greater say in decision-making.
But the Cabinet system remains, and nine councillors around the cabinet table will take all the big decisions affecting the local authority.
These will be scrutinised by a series of scrutiny committees.
Mr Hudspeth pledged to continue to work hard on behalf of Oxfordshire's residents.
He added that his door was 'always open' to other local authorities on the tricky topic of devolution.
Earlier this year the county council put forward plans for a super council, replacing the county council and five district councils to save an estimated £400,000 a week.
City council leader Bob Price has said the proposal for a unitary council would be 'a disaster'.
Deddington council Arash Fatemian told councillors at the meeting: "I have known Ian for quite some time - I am confident he will continue as a fine leader of the council - he is hard-working and often first in, last out.
"When he was cabinet member for highways he would often fall asleep studying maps of the county.
"Leaders need a grand vision and Ian is one with many grand visions.
"I was looking forward to riding a monorail in from the frozen north but I guess it isn't ready yet."
Liberal Democrat councillor for Abingdon South Neil Fawcett said: "We accept the Conservatives did a deal with Mark and Les to take control.
"We will try to scrutinise the key decisions in a constructive way and hold the administration to account."
Three former county councillors who have given eminent service to Oxfordshire while representing the residents of Didcot and East Hagbourne, North Hinksey, Botley, Wytham and Oxford have been appointed Honorary Aldermen.
They are former councillors Janet Godden, Patrick Greene and Tony Williamson.
Oxfordshire County Council’s Chief Executive Peter Clark said: "It is an honour they richly deserve and their contributions will certainly be long remembered by all of us at the county council."
Councillors at the meeting also paid tribute to former deputy leader of the council Rodney Rose for his work and wished him well as he has been ill.
AT A GLANCE
WOODSTOCK councillor Hudspeth was elected as a county councillor in 2005, retaining his seat in 2009.
In 2007 he became Cabinet Member for Transport.
From 2009 to 2011 his portfolio was Growth and Infrastructure covering strategic planning including transport, and housing waste.
He was elected Leader of the County Council in May 2012 and can now serve another four years as leader.
His portfolio includes strategy, corporate and community leadership, regional and strategic infrastructure and planning, economic growth and development and liaison with district councils.
FARINGDON councillor Mrs Heathcoat has been a county councillor for the past 20 years and has been in the cabinet for eight years.
She was first elected to Faringdon Town Council in 1987 and then to Vale of White Horse District Council.
She worked in the health service working in teaching hospitals in Birmingham and London and for the last 22 years of her working life was employed at the Defence Academy of the UK as Head of Course Administration.
Her new role as Deputy Leader of the Council includes responsibility for the fire service, trading standards and emergency planning.
Mrs Heathcoat is an active church member and enjoys walks in the countryside.
BICESTER North councillor Lawrie Stratford now has the Adult Social Care portfolio and is expected to liaise with the Oxfordshire Joint Health and Overview Scrutiny Committee about ongoing changes to the health service, involving improved links between social care provision and the NHS.
He has been a school governor in Bicester for about 10 years, and has served as a councillor on Cherwell District Council and Bicester Town Council for five years. He is also a former Mayor of Bicester.
His interests include travel, gardening, the theatre and most sports, in particular running.
CHALGROVE and Watlington councillor Mr Harrod is now Cabinet Member for Children and Families and is the Statutory Lead Member for Children's Services.
He joined the county council in 2014 and last year took over cabinet responsibilities for education from Melinda Tilley.
Born in Wendover in 1954, he grew up in Africa in the Old Colonies – Kenya, Rhodesia.
He was married in 1982 to Catherine in South Africa and returned to England 1999.
Mr Harrod has a grown-up daughter and son and has been living in Great Milton since 2002.
He has been a parish councillor since February 2005 and chairman of the parish council since 2010.
He has also been a district councillor for the Great Milton ward of South Oxfordshire District Council since 2011.
SHRIVENHAM councillor Yvonne Constance is the Cabinet Member for Environment, one of the most difficult portfolios in the cabinet as the role includes transport, waste management, flooding, and the strategy overseeing minerals extraction.
Mrs Constance is a barrister and has served served on the Board of St Mary's Hospital, Paddington.
She has has experience on the boards of RWE npower and Network Rail and is district councillor for the Vale of White Horse District Council's Ridgeway Ward.
BENSON and Cholsey independent councillor Mr Gray has been appointed the new Cabinet Member for Local Communities.
The former social worker will oversee the council's links with local communities, parish councils and others.
His brief will also include work relating to equalities, community funding, the work of county councillors in the areas they represent, work with the voluntary sector and Neighbourhood Plans.
Mr Gray has been busy working with the county's children's centres in a bid to keep as many open as possible after they were threatened with closure due to government cuts.
CHIPPING Norton councillor Mrs Hibbert-Biles is Cabinet Member for Public Health and Education.
She has been a member of the planning committee county and district councils.
She was Vice Chairman of the county council from 2009-2010 and the Chairman of the County Council 2010-2011. She has also held the post of Cabinet Member for the Environment.
Mrs Hibbert-Biles is also on the Health Improvement Board as well as the Health and Wellbeing Board and the Children's Trust.
She was a West Oxfordshire District Councillor from 2002-2014 holding cabinet positions covering health, housing, leisure and tourism, and children and young people.
She is married with two daughters and two grandchildren.
BERINSFIELD and Garsington councillor Mrs Lindsay-Gale is Cabinet Member for Property, Cultural & Community Services.
This includes responsibility for the libraries network, the museum service, and the Music Service.
Born in Oxfordshire, after studying politics, economics and law at The University of Kent she worked as an advertising copywriter before deciding to embark on a second career.
She joined Oxford Archaeology, a local archaeological practice working with national and international clients.
In 2009 Mrs Lindsay-Gale was elected to the Dorchester division of the council and was re-elected in 2013 to the re-named division of Berinsfield and Garsington.
Her main hobby is screen writing.
SONNING Common councillor David Bartholomew is Cabinet Member for Finance and his portfolio includes responsibility for finance, broadband, communications, and ICT.
Mr Bartholomew lives in Henley and joined the council in 2013.
The cabinet member says his political knowledge is backed by 'wide commercial experience in businesses large and small', and a passionate commitment to the area in which he has lived with his family for nearly 30 years.