The 25-year-old French-born Algerian international winger, outstanding in Leicester's incredible charge towards the Premier League title, received the trophy at a lavish awards ceremony in London.
Mahrez, a £400,000 ($580,000) signing from French Ligue 2 side Le Havre in January 2014, has contributed 17 goals and 11 assists to help put Leicester on the brink of becoming English champions for the first time.
He had scored the opener in the Foxes' 4-0 thrashing of Swansea City earlier in the day at the King Power Stadium that left Claudio Ranieri's side eight points clear of second-placed Tottenham with three games left to play.
Mahrez was then flown down by helicopter to the ceremony as he held off competition from club colleagues Jamie Vardy and N'Golo Kante as well as West Ham United's Dimitri Payet, Tottenham's Harry Kane and Arsenal's Mesut Ozil to win the award.
However, Mahrez later dedicated the success to his colleagues.
"All the credit is for them, seriously," said Mahrez, who succeeds Chelsea's Eden Hazard as the winner of the prize.
"And for my manager and the staff. Without them I wouldn't receive this award and I wouldn't score. It's the team spirit, and I want to dedicate it to them.
"I'm very grateful to receive this award, it's a pleasure. It's extra special because if the players vote for me it's because they've seen I've been great this year so I'm happy.
"But it's more team things. Without my team-mates I wouldn't get this award."
Alli, who won the Football League Young Player of the Year 12 months ago, joined Tottenham from lower-league MK Dons in 2015 and was expected to be used sparingly in his first season at White Hart Lane.
However, he has been outstanding in midfield for Spurs and has already won six caps for England.
He was not there to pick up his award in person as Tottenham play West Bromwich Albion in the Premier League on Monday night.