The 20-year-old world number 111 recovered from letting two match points go in the fourth set before prevailing 3-4(6-8) 4-1 4-2 3-4(9-11) 4-1.
The tournament is the season-ending event for the top-ranked male players aged 21 and younger.
The event uses a best-of-five format with four games winning a set.
Former champions include current top 10 players Carlos Alcaraz, Jannik Sinner and Stefanos Tsitsipas.
This season, Medjedovic reached tour-level semi-finals in Gstaad and Astana and won three ATP Challenger Tour events.
He is the lowest-ranked champion in competition history but converted his third match point to get past his 19-year-old opponent, ranked 36 in the world.
“I can’t believe I have won this title but it’s going to give me a lot of confidence for 2024,” he told reporters.