The 54-year-old Britton, the director of instruction at Donald Trump's Colts Neck, N.J., facility, broke the tournament record set by Jeff Coston in 2006.
Britton made a 5-foot par putt on 18 to preserve the victory after Arthur (66) made an 8-foot birdie putt.
"Perry didn't have to make a 3 on the last to make it tough," Britton said, joking. "I left my first putt a little shorter than I wanted to, but played the putt to move a little left and it dropped."
Britton, who won the 1989 Centel Classic for his lone PGA Tour title, and Arthur were tied at 15 under through 12 holes on the PGA Golf Club's Wanamaker Course. Britton pulled away with birdies at Nos. 13 and 14.
"Perry was doing really good early and it was close," Britton said. "I was plodding along, then made a 12-footer at 13 for a birdie and at No. 14, I made a 20-footer uphill into the grain for birdie. I was fortunate and feeling pretty good from there."
Britton, the low club professional in the 2007 Senior PGA Championship, led the 35 qualifiers for the Senior PGA Championship in May at Colorado Golf Club.
"I will probably appreciate this all a little more later, I am still a little nervous," he said. "I think I made all the putts that I didn't make all summer long down here this week."
Arthur is a teaching pro at Sherrill Park Golf Course in Richardson, Texas.
"I made six birdies, shot 66 and my hat's off to Bill," Arthur said "Bill kept it going so well with birdies on 13, 14 and 16. Bill and I have played a lot of golf together, much of it on the tour. I knew how good he was with the putter."
Paul Daniels of Port St. Lucie, Fla., shot a 69 to finish third at 15 under.