Prof Simon Wessely, said he was "genuinely surprised and incredibly honoured" by the award.
He now heads the department of psychological medicine at the Institute of Psychiatry, King's College, London.
He became interested in "medically unexplained symptoms and syndromes" early in his career, and studied chronic fatigue syndrome (CFS) - or ME.
In 1991 he was involved in setting up one of the first NHS clinics for people with CFS symptoms and in the mid 1990s, he started to investigate Gulf War Syndrome.
This disputed condition had been linked to personnel who served in the first Gulf conflict in 1990-91.
Reported symptoms ranged from chronic fatigue, headaches and sleep disturbances to joint pains, irritable bowel, stomach and respiratory disorders and psychological problems.
Prof Wessely has said there may not be a distinct illness.
He said: "Gulf War Syndrome is a misnomer," he said. "Rather it's an illness or health effect.
"We established something happened, but we found no specific cause.
"The fascinating thing is that it didn't happen again in Iraq, and the reason for that remains enigmatic."
Prof Wessely continues to study the long-term effects on those now serving in Iraq and Afghanistan.
But he said that there had been improvements in the mental health care for armed forces personnel and those close to them.
"There is now improved psychological support, particularly for reservists and families."
He was among a large number of researchers, charity workers and NHS staff to receive honours.
Other health experts recognised included Stephen O'Brien, Chair of Barts and The London NHS Trust, who also receives a knighthood.
Respiratory health expert Prof John Britton and Caroline Shaw, chief executive of Manchester's specialist cancer hospital, The Christie are among those made CBEs.
One of those is Caroline Shaw, who is appointed a CBE for her work running The Christie cancer hospital in Manchester.
A former midwife, Ms Shaw was one of the youngest female NHS chief executives when she took over at the Christie in 2005.
She said: "I am incredibly proud... It is such a huge honour to be recognised in this way for my work in an industry I believe in and care passionately about."

Leonie Granger from Gillingham, Kent, was sentenced at the Old Bailey having been found guilty of manslaughter.
Her boyfriend Kyrron Jackson, 28, and his friend Nicholas Chandler, 29, were found guilty of murder and jailed for life with a minimum term of 36 years.
Granger targeted Mehmet Hassan, 56, in a Mayfair casino in March last year.
Judge William Kennedy described the attack as "pitiless and wicked", adding: "It was quite simply an act of brutality which defies reason and compassion."
Granger's lawyer Orlando Pownall said she only took part in the plot as she was in love with Jackson and "fell in with his desires" and now "deeply regretted" her actions.
"Her head was turned by Jackson, who she loved, and to some extent by Chandler who was persuasive and superficially charming," he said.
But Judge Kennedy said she had been "deceitful from the outset" and had "lost her sense and compassion" when she got involved.
He added that she clearly cared more for Jackson than he cared for her.
Granger, who posed under the name of Rachel, was wined and dined by the divorced father of three who boasted to friends he was not paying her to be with him, the court heard earlier.
On the night he was killed, Mr Hassan had taken Granger to the upmarket Nobu restaurant before giving her Â£1,000 to gamble with at the nearby Palm Beach Casino.
The two were seen kissing passionately by a poker supervisor, before leaving the casino together for Mr Hassan's flat in Islington.
Granger then let Jackson and Chandler into the poker player's flat before leaving in a taxi.
Both men tied up Mr Hassan with parcel tape and a neck tie before kicking and stamping him to death, the trial was told.
Afterwards, while he lay dead in a pool of blood, all three were filmed on Granger's mobile phone throwing Â£50 notes around a room and even stuffing  them in their underpants.
Commenting on the footage, Judge Kennedy told the three defendants: "The eloquence with which it speaks about you is deafening."
A leading researcher into the mental health of military personnel has been knighted in the New Year's Honours.
[NEXT_CONCEPT]
A woman who set a "honey trap" for a professional gambler who was kicked to death for his winnings has been jailed for 16 years.