Williams took the first set and was three points up when the Spaniard stopped play at 53 minutes, handing the American veteran the 47th title win of her career, and her first victory at a WTA Premier Five event since she beat Victoria Azarenka in 2010 in Dubai.
Wimbledon finalist Muguruza -- ranked world number eight, 15 places ahead of American veteran Williams -- had a tough semi final against Germany's Angelique Kerber, winning in straight sets but falling during the closing tie break and injuring her ankle.
"It's a sad day I had to retire. Sometimes your body's not recovered," the 21-year-old said on court after the match.
Muguruza called her coach Sam Sumyk -- who was wearing a t-shirt bearing the phrase "It's not my fault" -- on court during the first set but no words of advice could change the slow pace of the match.
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Williams, who turned pro the year that Muguruza was born, was also struggling during the final with leg pain and had both of her thighs wrapped.
"I probably wouldn't have had many chances if you had been feeling well," Venus said in an on court interview.
The title win will put Williams back in the top 20 when the new rankings are released on Monday, after entering Wuhan as number 23.
The former world number one was diagnosed with an autoimmune disease in 2011, and while she continued to play some tournaments, she has struggled with her health and slipped down the rankings.
Muguruza will also achieve a career high of five in the world rankings after making the finals at Wuhan, and will likely qualify for Singapore, barring any major upsets in next week's China Open in Beijing.