Bruce has now spent £2 million of that money on 23-year-old Watson, who was poised to join Middlesbrough until Wigan stepped in and offered a more lucrative contract.
England Under-21s midfielder Watson, who made 189 appearances for Palace, has signed a three-and-a-half-year deal with Wigan.
Watson could make his debut in this week's match at home to title-chasing Liverpool, just under four years after he last played in the Premier League.
Bruce said: "We have been watching Ben for some time, and believe he has the maturity to step back to the highest level and make an impression.
"He's a midfielder who scores goals, has quick feet, plenty of power and is a terrific prospect.
"I wanted to move quickly to start filling the gap left by Wilson Palacios, and Ben is the start of that process."
After beating Gareth Southgate to the punch for a player who was due to be out of contract in the summer, Bruce added: "It speaks volumes about the progress of the club that we can compete with established Premier League clubs for players.
"I am delighted Ben has agreed to join us. I think our supporters will take to him quickly, because he's a real hundred percenter."
Southgate meanwhile has spoken of his disappointment having thought Middlesbrough had a done deal when Watson underwent a medical with the club last week.
"It's disappointing to see Ben go to Wigan because we have put a couple of months into trying to make it happen," he said. "I think he would have slotted in well here and I'm sure he would have enjoyed himself.
"But we have to move on. We are looking at other possibilities."