Matt Sparrow put Nigel Adkins' Iron side ahead with an early goal at Wembley on Sunday before two goals in as many minutes by the Lions' Gary Alexander put Kenny Jackett's men in pole position for a return to the Championship.
But Woolford then created a second for Sparrow after the break before scoring the winner with just five minutes left.
Millwall certainly had the upper hand in the stands, with their supporters outnumbering the contingent from Glanford Park by at least five to one, but it was the smaller club who toasted success after a fabulous match at a scorching Wembley.
Both sides made a lively start and Scunthorpe took the lead with a fine goal in the sixth minute.
Paul Hayes found Gary Hooper with a clever flick and the striker placed a backheel perfectly into Woolford's path.
The winger hit a low left-footed shot which David Forde palmed out and Sparrow reacted first to slam into the roof of the empty net .
Hooper's movement was too good for the Millwall back line in the early stages and he then hit the post from an improbable angle tight on the goal line after again finding space wide on the right.
Jackett's side were clinging on but Alexander pulled them level with a fabulous goal in the 37th minute.
A throw-in from the left was headed forward to the striker who pulled the ball down on his chest with his back to goal.
The forward then turned and hit a stunning shot on the bounce from 30 yards which sailed over goalkeeper Joe Murphy and into the back of the net.
The huge number of Lions fans erupted and were at it again just two minutes later when Alexander grabbed his second.
David Martin stood up a cross to the centre of the area and Alexander thundered a header into the bottom corner which Murphy got a hand to but could not stop from finding the net.
The goalkeeper had been the hero of the semi-final by saving two penalties against the MK Dons but he should have kept the ball out.
With temperatures nudging 100 degrees on the pitch, matching the scintillating pace of the first-half was a big ask of the players and the first 10 minutes of the second period passed by without a sight of goal for either side.
The game was in a lull but Scunthorpe responded well to level in the 70th minute with another excellent goal. Woolford played a one-two with Hayes down the left and burst past Zak Whitbread into the area.
He crossed behind Hooper to Sparrow who had picked up a position unmarked in the middle of the area.
The winger showed remarkable composure to calmly sidestep Forde and, with three defenders converging on him, clip a left-foot shot into the roof of the net.
Alexander then wasted the chance of scoring a hat-trick at Wembley when he met substitute Chris Hackett's cross with a header that flew a yard wide of the near post as both sides searched for a winner in normal time.
And Adkins' men found it in the 85th minute.
A long free-kick forward was not dealt with and after Sparrow and Hayes both saw efforts blocked Woolford collected the ball and rifled a low shot right through Forde in the Millwall net.
There was still time for Millwall's record signing Neil Harris to spurn a good chance but Scunthorpe held on for a famous victory which sees them back in the Championship at the first attempt.