It is the second time that Spaniard Nadal has taken the honour, while Wozniacki becomes the first Danish player to receive a senior ITF award.
American twins Bob and Mike Bryan were named men's doubles World Champions for a record seventh occasion, while Gisela Dulko of Argentina and Flavia Pennetta of Italy become women's doubles World Champions for the first time.
Nadal became only the seventh man in history to win a career Grand Slam when he won the US Open title in September.
The 24-year-old also captured his fifth French Open title and second Wimbledon crown to regain the year-end number one ranking from Roger Federer.
With an Olympic gold medal and two Davis Cup titles to his name, the Spaniard has now won all of tennis's major prizes.
Nadal said: "It is an honour to be named ITF World Champion for the second time. After a difficult year in 2009, it was an amazing feeling to regain the No. 1 ranking and finally win the US Open.
"My goal all the time is to keep improving and be a better player each year than I was the previous year."
Wozniacki became the fourth-youngest woman after Martina Hingis, Monica Seles and Steffi Graf to earn the year-end number one ranking.
The 20-year-old was the most consistent player on the circuit, earning a tour-high six titles, in Ponte Vedra, Copenhagen, Montreal, New Haven, Tokyo and Beijing.
Wozniacki said: "What an honour it is to be named ITF World Champion. To be listed with all the former ITF World Champions is something I am really proud of. I had a great year in 2010 and I'm training hard to have an even better year in 2011."
In other ITF awards, Youth Olympic champions Juan Sebastian Gomez of Colombia and Daria Gavrilova of Russia were named as Junior World Champions, while the ITF Wheelchair World Champions are Esther Vergeer of the Netherlands and Shingo Kunieda of Japan.
The ITF World Champions will receive their awards at the annual ITF World Champions Dinner on May 31 in Paris, during Roland Garros.