Heidar Helguson's goal 15 minutes from time was enough to see off a Lions outfit that had won four games in five.
Dichio walked in the 53rd minute for a second bookable offence after fouling Shaun Dyche, a challenge that injured the defender and ended his afternoon.
Millwall manager Dennis Wise on Daniel Dichio's sending off:
"Sean Dyche came off with a towel over his head but when he took it off there was nothing there. There was no cut.
"Danny was booked earlier after Dyche had elbowed him. It was understandable that Danny was upset by this and retaliated."
Watford: Jones, Doyley, Cox, Dyche (Webber 56), Darlington,
Chambers, Mahon, Gunnarsson, Jackson (McNamee 67), Helguson,
Subs Not Used: Chamberlain, Dyer, Bouazza.
Goals: Helguson 75.
Millwall: Marshall, Muscat, Lawrence, Elliott, Phillips,
Sweeney (Simpson 45), Morris (Dunne 82), Serioux (Healy 64),
Livermore, Hayles, Dichio.
Subs Not Used: Stack, Wise.
Sent Off: Dichio (53).
Booked: Dichio, Muscat, Livermore.
Ref: C Penton (Sussex).