The Bit o' Red clinched the top spot thanks to a 3-2 home win over St Patricks Athletic.
They did, however, need an 88th-minute penalty from Mark Quiqley to scour the three points, after blowing a two-goal lead.
"These are the sort of days you want to be playing. You put on boots as a young lad and you hope to score the winner to win the league. Luckily enough I was put in that position to score," said the goalscorer, to Irish TV station RTE.
"To score in, probably, the 90th minute is just unbelievable and it has takedn my breath away. I am just delighted to have won my first league title.”
Raffele Cretaro netted after 21 and 24 minutes as Sligo took a positive approach to try and win the title in front of their own fans - although with the cushion of knowing they had two more games to play after this, and a six point lead before kick-off.
Christy Fagan and Chris Forrester hauled the visitors back into the match before a dramatic finale, which saw both sides reduced to 10 men.
Baraclough took charge at the Showgrounds in February, after being recommended to the club by former Iron director Simon Elliott who is now chief executive of their sponsors Volkswagen in Ireland.
It left him with just a few days to prepare before the start of the season, as he was drafted in to replace Paul Cook after he quit to take charge of Accrington, but the campaign turned out better than even he probably imagined.
Baraclough was in charge of the Iron from September 2010 until March 2011, when a 3-0 home loss to Preston - marred by many Iron fans calling for his dismissal - bended a seven-year association with the club as player, coach and boss.
In total he oversaw 34 competitive matches as manager, with eight wins, four draws and 22 defeated.