The on-loan Udinese striker tapped in Watford's 20th-minute opener before unselfishly setting up Troy Deeney for the Hornets' second 14 minutes later.
And Czech Vydra rounded off the win 18 minutes from time with a composed flick as Gianfranco Zola's men registered a third successive win to improve their promotion prospects.
The Hornets were playing what was a game in hand for them, and he victory puts them just a point behind second and third-placed Leicester and Hull.
Birmingham City's Marlon King struck in the penultimate minute to give his side a 2-1 win away at 10-man Burnley.
Curtis Davies had opened the scoring for City after 20 minutes before Ross Wallace levelled from the sport shortly after half-time.
Burnley then had Dean Marney sent off shortly after, however, and King then popped up in the dying moments to earn all three points and halt the Clarets' efforts to make a run into the play-off spots.
Sheffield Wednesday scored twice in the last six minutes to come from behind and win 2-1 at Charlton Athletic.
Johnnie Jackson had put the Addicks on course for what seemed like being a victory, but Reda Johnson and Leroy Lita's goals on 84 and 89 minutes gave Wednesday victory to boost their hopes of pulling away from the relegation dogfight.
Two goals from the promising Thomas Ince gave Blackpool a 2-1 win at Wolves - Dean Saunders' first defeat as boss of the Molineux club.
Things looked bright for the home side when Sylvan Ebanks-Blake headed them into a 15th-minute lead - but Ince took advantage of hesitation from Roger Johnson to level the scores just before the break.
Ince got the winner in the 78th minute, before Johnson was sent off at the end to compound Wolves' misery.
Bristol City turned over a deficit to win 2-1 and earn just their seventh win of the season as they beat Ipswich Town.
Daryl Murphy had put the Trotters ahead on the half-hour mark before Steve Davis equalised just after half-time, and Jonathan Stead found the net in the dying moments to give Bristol City all three points.
The Robins remain bottom of the Championship, but are now level on points with 23rd-placed Barnsley.