And he has become the first person to be honoured while in space.
Major Peake said from the International Space Station: "I am honoured to receive the first appointment to the Most Distinguished Order of St Michael and St George for extraordinary service beyond our planet."
He dedicated his award for space research and scientific education to all who had made his mission possible.
Sending a message from the ISS, he said:  "All of the training and preparation couldn't prepare me for looking down on our Earth from orbit. But this isn't an award for me.
"This is to recognise the hundreds of dedicated staff who have made my Principia mission possible, working together across national boundaries to build, operate and maintain our scientific outpost in space - the International Space Station."
The 44-year-old, who is due to return to Earth on 18 June, was made a Companion of the Order of St Michael and St George.
Earlier this week in a live link-up from orbit, he said that his spacewalk was the highlight of his six-month mission.
On his return he was looking forward to "private time" with his family, fresh air - and the feeling of raindrops on his face.
Elsewhere, in the Queen's Birthday Honours list, there is a CBE for Prof John Ludden, executive director of the British Geological Survey, for services to geoscience.
Prof Sue Black, a leading expert in forensic anthropology, received a Damehood for services to her profession.
As director of the Centre for Anatomy and Human Identification at Dundee University, she has helped secure convictions in high-profile criminal cases.
And there is an OBE for Prof John Brown, Scotland's Astronomer Royal.
Astronaut Tim Peake has been recognised in the Queen's Birthday Honours list.