Watford striker Deeney was on hand to convert John Eustace's cross to get his side back on level terms in the 12th minute after Hull centre-half Chester had headed the visitors into a fourth-minute lead.
The Hornets, who had Adrian Mariappa sent off in the second half, began the day seven points off the top six having lost only one of their last nine in the npower Championship, but have secured only two points from their last three games to fall off the pace.
Nick Barmby's Hull ended a run of five straight defeats with victory over Middlesbrough on Monday, but after climbing to within four points of a play-off spot, despite their poor run, they are now six points adrift with three games remaining.
Watford made just one change with Joe Garner back in midfield in place of Britt Assombalonga, while Liam Rosenior returned to Hull's back four.
Hull made a flying start in pursuit of their first away win since a 3-0 success at Cardiff in the middle of last month.
Left-back Andy Dawson supplied a quality cross from the right byline and Chester rose above the home defence to plant a downward header beyond Watford goalkeeper Tomasz Kuszczak in the fourth minute.
But the Tigers' lead lasted only eight minutes. Watford midfielder John Eustace slipped the ball inside on the left edge of the penalty area and Deeney turned the ball home from six yards.
Kuszczak, on loan from Manchester United, then denied Chester and Hull a second, turning away another header, this time from Dawson's corner in the 17th minute.
Hull striker Matty Fryatt's shot was well held by the Polish goalkeeper soon after and Watford defender Nyron Nosworthy blocked Rosenior's goalbound shot as the visitors looked to get back on top.
Tigers midfielder Corry Evans then crashed an angled drive from inside the area against the crossbar and Josh King headed Robert Koren's cross narrowly off target just before the break.
Deeney pulled a shot wide when well placed in the area shortly after the restart before Hull were dealt an injury blow, with winger Josh King forced off through injury and replaced by Cameron Stewart.
Watford defender Carl Dickinson twice went close to edging his side in front with a header and then a shot flying wide in as many minutes.
Dawson's 20-yard free-kick at the other end was held by Kuszczak and then Watford were reduced to 10 men when half-time substitute Mariappa was sent off for his second bookable offence.
The Watford defender, who replaced Martin Taylor at the interval, was first booked by referee for a foul on Stewart and then received a second yellow card four minutes later for bringing down Rosenior.
Hull sensed three points were there for the taking and Koren fired just wide from the edge of the area and then had a shot blocked.
Watford manager Sean Dyche sent on Chris Iwelumo for Garner with seven minutes remaining and within 60 seconds the striker lashed a low shot inches wide, but the game ended in stalemate.