A tense 120 minutes between the Yorkshire rivals was followed by a dramatic shoot-out which sent Grayson's men into the second tier and keeps the Blades in League Two
Steven Quinn and Peter Clarke had the best of the chances during the game in the sweltering heat but both defences were on top throughout a match which rarely excited the Wembley crowd.
There was nothing to separate the sides after a physically draining 120 minutes so the match headed into a penalty shoot-out to decide the play-off final.
Huddersfield missed their first three penalties but Alex Smithies managed to take it to sudden death with three saves.
After 11 converted penalties in sudden death, goalkeeper Steve Simonsen fired his spot-kick high over the bar to hand the Terriers promotion to the Championship.
Huddersfield goalkeeper Ian Bennett was ruled out after injuring his hand in the return leg of the semi-final win over MK Dons so Smithies continued in goal whilst midfielder Scott Arfield took a place on the bench after an ankle problem.
Sheffield United's Richard Cresswell missed the second leg of the Blades' 1-0 semi-final win over Stevenage due to an eye infection but the striker made his 100th start for the club at Wembley. However Kevin McDonald aggravated his hamstring in that match and missed out, with Nick Montgomery returning to the starting line-up.
Both sides tried to make an impression on the opposition early on with a couple of crunching tackles. Callum Woods in particular was fortunate not to see at least a yellow for a high challenge on Lee Williamson.
The Blades enjoyed early possession in their own half but but were never in control of the game, which was becoming a midfield scrap in the torturous heat at Wembley.
There was a nervous moment for the Terriers' fans in the 11th minute. A poor clearance from Smithies allowed Cresswell a shot which was blocked by Morrison with the keeper again flapping at a cross from Ryan Flynn.
The closest either side came to scoring in the first half was after 35 minutes with Smithies again looking unconvincing as he came rushing off his line and missed his punch, fortunately for him Cresswell was unable to control the loose ball in the box.
The service into the forwards from both teams was severely lacking quality as the first half came to a close with neither side managing to test the opposing goalkeeper with a shot on target.
After all the huffing and puffing in the first half without any clear chances on goal, the second half nearly got off to a flying start when Danny Ward’s snap shot rocketed off the crossbar from 25 yards out with Steve Simonsen well beaten.
The Huddersfield fans thought they had taken the lead on the hour mark, when Peter Clarke rose highest and powered a header down which brushed the side netting on its way wide of the near post.
Kallum Higginbotham then wasted a good chance for the Blades in the 69th minute when he elected to shoot from a tight angle rather than picking out Lee Novak, who was furious after making a lung-busting run to provide some support.
Both sets of players looked heavy-legged as the match entered the final 10 minutes; with neither side posing a serious threat going forward, extra-time looked increasingly likely.
However, Huddersfield had a sudden flurry chances within a matter of moments. A Jordan Rhodes header from a corner was saved by Simonsen before Doyle managed to scrape the ball of the line.
Immediately after, Ward delivered another good cross from a corner which was headed agonisingly wide by Clarke.
Huddersfield desperately searched for a late winner as Sheffield United hung on with a couple of great blocks on the edge of their box to take the game into extra-time.
Steven Quinn provided the best moment of added-time when his jinking run past two defenders ended with a shot which was well blocked by Smithies at his near post.
Clarke then came agonisingly close to a winner when his header from a deep free-kick by Roberts was hooked out by Montgomery before it could trickle over the line, taking the match into penalties.
In the shoot-out Miller, Williamson and Johnson all failed to convert before Collins gave the Blades an advantage.
Simonsen then kept out Lee before Smithies did the same to Lowton. Terriers skipper Clarke scored to make it all even before Taylor struck the post.
Arfield and Porter kept cool under pressure to take matters into sudden death and a remarkable 11 penalties were scored before the goalkeepers were given their chance.
Smithie made no mistake against his opposite number before Simonsen blazed his effort over to send Huddersfield into the Championship.
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