The 10-1 chance, bred and part-owned by Lord Oaksey, who won the race as a jockey in 1958, was in touch throughout under Mattie Batchelor.
He pushed on to beat Planet of Sound into second with Fair Along running on for third, ahead of Great Endeavour.
Earlier, Big Buck's completed a hat-trick of Long Distance Hurdle victories to make it 13 consecutive wins, while Overturn beat Binocular at Newcastle.
The three-time Cheltenham World Hurdle winner barely had to get out of second gear, jumping the final obstacles strongly as he matched dual champion hurdler Bula's winning run of the 1960s.
Jockey Ruby Walsh, who was completing a treble for trainer Paul Nicholls after wins for Prospect Wells and Rock on Ruby, said: "He's just an incredible horse, he's never out of second gear."
Carruthers, who was fourth behind Imperial Commander in the 2010 Cheltenham Gold Cup, before finishing ninth behind Long Run in this year's race, was always towards the front of the Newbury event, alongside favourite Aiteen Thirtythree.
Great Endeavour threw down his challenge on the far side rail as he tried to become only the fourth horse to do the Paddy Power-Hennessy double.
The David Pipe-trained runner looked to have the measure of Carruthers two fences from home, but Batchelor's mount held the verdict going to the last and sealed victory with a fine leap.
The 82-year-old Lord Oaksey, a former TV racing presenter and founder of the Injured Jockeys' Fund, was too frail to be at the racecourse, but his horse secured an emotional win.
"I can't speak. I lost my mum two years ago today," said Batchelor. "He's a brilliant old horse, last year he was wrong, this year he's better than ever.
"I schooled him the other morning and he was in the form of his life. He doesn't know when to give up. He came up for me at the last - he's a great horse."
Bradstock, Lord Oaksey's son-in-law added: "It's my biggest win by a long way. You've obviously got the King George and the Gold Cup, but the Hennessy is in the top six races you would want to win as a trainer.
"We bought the mare just as a bit of fun for John Oaksey's retirement and this is her first progeny.
"We're just a small yard, but we've got good owners and horses like this are a reason to get out of bed in the morning."
Meanwhile, at Newcastle, the 2010 Champion Hurdle winner Binocular was beaten by the Donald McCain-trained Overturn in the Fighting Fifth Hurdle.
Overturn (7-4) led for most of the race under Jason Maguire, who had earlier ridden stable-mate Peddlers Cross to victory at Bangor before making a trip by helicopter to Newcastle, but although Binocular (5-4 favourite) and jockey Tony McCoy kept in touch, they were unable to get past the winner.
Maguire said: "His jumping is so quick. Whether he's long or short he gets away from his hurdles so quickly. He was getting tired coming to the last and missed it a bit, but he was soon away from it and gone. You'd struggle to ride a horse tougher than him."
Connections of Binocular were not too disheartened after he was beaten as favourite in this race for the third successive year.
Owner JP McManus' racing manager Frank Berry said: "We were beaten by a better horse on the day but our lad jumped well and came there with every chance. We should come on a lot for the run and Kempton [Christmas Hurdle] is the plan."
LORD OAKSEY FACTFILE
Born John Lawrence on 21 March 1929
As amateur jockey won 1958 Hennessy Gold Cup on Taxidermist
Finished second in the 1963 Grand National on Carrickbeg
Former ITV, Channel 4 and BBC racing presenter
Father-in-law of Mark Bradstock, who trains Carruthers
President of the Injured Jockeys' Fund