His precise free-kick in the 74th minute to cap a sensational performance was his second of the season – his first also coming in a 1-0 win over Newcastle in November.
Rovers keeper Jason Steele was undoubtedly the man of the match thanks to a series of stunning saves, including two to thwart Dwight Gayle.
Rafa Benitez’s side had two goals disallowed and rattled the woodwork but were unable to get on the scoresheet as they surrendered top spot in the Championship.
The result ends a six-game winless run for Rovers, and they become the first team to do the double over Newcastle this season.
Rovers captain Jason Lowe returned from suspension – one of two changes for the hosts. Mohamed Diame, who scored on this ground last season for Hull, was one of three changes for Newcastle.
Buoyed by almost 7,000 travelling supporters, the Magpies had a sight of goal 10 minutes in when Isaac Hayden tried his luck from 25 yards but could not find the target.
The visitors were desperately close to the opener after 19 minutes when Diame surged forward and unleashed a ferocious 30-yard drive that flew past Steele but clattered the crossbar before bouncing out.
The pattern of the game was ominous for Rovers fans, as Gayle was given far too much space in the area midway through the half to cut inside and let fly with a low, left-foot shot that Steele tipped behind.
Steele had to be at his best twice more before half-time, as Yoan Gouffran’s disguised through-ball found Gayle 10 yards out but the goalkeeper’s outstretched leg repelled the shot.
And just before the break, Gouffran saw his controlled volley parried away.
Newcastle continued to dominate in search of a breakthrough and soon after Gouffran curled one wide, the Magpies had the ball in the net when Gayle glanced in a free-kick but was correctly ruled offside.
The Magpies had another goal ruled out just before the hour when a blocked free-kick fell perfectly to Ciaran Clark but after Steele somehow saved his close range effort, the defender’s hand got the last touch.
Neither the Newcastle onslaught, nor Steele’s heroics, showed signs of fading as Hayden’s 63rd-minute cross was volleyed goalwards by Clark but Blackburn’s star man athletically tipped over.
Sam Gallagher powered an effort wide but Rovers incredibly took the lead with their first shot on target in the 74th minute.
Just like at St James’ Park, Mulgrew was the hero, placing a 20-yard free-kick to perfection into the bottom left corner, and Rovers held on for a superb win.