Hodgson guided the Cottagers to the Europa League final which will be played against Atletico Madrid in Hamburg on Wednesday.
This season, the London club backed up their 7th place finish by grabbing 12th on the league table in addition to their record-breaking performance in Europe.
LMA chairman Howard Wilkinson praised Hodgson for his brilliant effort with Fulham in the past few seasons.
"Since joining Fulham, Roy has transformed the club's fortunes," said Wilkinson.
"He initially saved them from the brink of relegation then took them to their highest ever league position last season. This year he has capitalised on that platform, achieving remarkable success in this season's Europa League.
"He is highly respected by the LMA members and also on an international level where he has worked his miracles in no fewer than seven countries. He is a great role model for all aspiring managers and coaches and is fully deserving of this recognition."