Andre Gray came off the bench to fire Watford into the FA Cup semi-finals with his fine volley which secured a 2-1 win over Crystal Palace.
The Hornets had led in the tie at Vicarage Road when Etienne Capoue took advantage of some poor goalkeeping from Vicente Guaita and side-footed in the opener in the 27th minute.
Despite Palace chasing shadows in the first half, they improved markedly after the break and scored an equaliser through Michy Batshuayi.
The on-loan Chelsea striker stole the ball from Adrian Mariappa in the 62nd minute and slotted in his third goal for Palace in all competitions since arriving in January.
But Gray's superb volley 11 minutes from time was enough to send Watford into their first FA Cup semi-final since 2016 - when they were knocked out by Palace.
What would have undoubtedly been a huge boost for Watford ahead of kick-off was finding out that Palace's talisman, Wilfried Zaha, was absent through injury.
The winger sustained a minor calf injury in training and, with Palace's priority this season being Premier League survival, Hodgson took no chance with Zaha's fitness and omitted him entirely from his matchday squad.
The hosts, meanwhile, welcomed Heurelho Gomes back into the starting line-up - a much deserved recall for the goalkeeper, who had kept clean sheets in each of his last three FA Cup games.
Watford also welcomed Video Assistant Referee (VAR) to Vicarage Road for the first time and, indeed, there were questions asked early on as to why the technology wasn't referred to when James McArthur appeared to hold back Will Hughes in the box.
After complaining that no penalty had been awarded for the apparent foul, Watford piled the pressure onto Palace's defence - with Guaita having to make a fine save to deny Gerard Deulofeu from a tight angle.
But the Palace goalkeeper was then thrust into the spotlight when he failed to punch clear a corner into the box, which was played back into the area and to Capoue, who side-footed it home.
Smelling blood, the Hornets quickly went in search of a second - and nearly got it when Deulofeu again forced a save from Guaita.
But Watford had to settle for a 1-0 lead at the break, with Palace then having 15 minutes to work out how to try and score an equaliser knowing they were seriously lacking in pace going forward and knowing Batshuayi was suffering from a lack of service.
However, the chance to equalise presented itself to the Eagles shortly after the restart when, from a corner kick, Townsend's effort travelled through a number of bodies and looked to be creeping into the net only for Gomes to spot it and keep it out.
It seemed as though Palace's best chance to score would come from a set-piece and, indeed, they threatened from such a situation shortly afterwards when Townsend's free-kick was tipped over by Gomes.
But their equaliser didn't arrive from a set-piece but from an error by Adrian Mariappa. After being too casual in collecting a clearance, the defender was dispossessed by Batshuayi who surged forward and coolly slotted past Gomes.
Palace were back in the tie, and sensing the urgency to punish Watford's second-half game plan of sitting back and inviting pressure, Batshuayi ran clear only to see Max Meyer not take advantage of his cut-back.
The Hornets' response was rapid. After Guaita flapped at a cross, he managed to keep out Roberto Pereyra's fierce effort.
But the Palace goalkeeper could only stand frozen to the spot when, following a swift counter-attack, the Argentine sent the ball into the box and saw Gray - who had come on just two minutes earlier - time his volley to perfection to net the winner.
Hodgson sent on Christian Benteke as a last resort, but he could not inspire a late equaliser to force extra-time and Watford will now go to Wembley as they look to build on a steady campaign under Javi Gracia while Hodgson's Wembley dream is over.
Starting line-ups, match highlights and reaction
Watford XI: Gomes, Femenia, Mariappa, Cathcart, Holebas, Hughes, Doucoure, Capoue, Pereyra, Deulafeu, Deeney
Crystal Palace XI: Guaita, Wan-Bissaka, Kelly, Tomkins, Schlupp, Milivojevic, Kouyate, Meyer, McArthur, Townsend, Batshauyi
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