The announcement was made during the finale in Venice on Sunday night, after the contest was postponed last year due to the COVID-19 pandemic.
Di Palma hails from the Naples suburb of Scampia, which is known for its high crime rates, mafia wars and poverty.
She dedicated the victory to her mother, Maria Rosaria.
“She raised us alone with so many challenges; when I was 10 years old, she lost her job and my grandmother who was helping us also died,” di Palma said.
“She’s worked a thousand jobs, some not so great.
“She’s my idol and she taught me to be resilient during the dark times.”
Di Palma’s mother founded La Lanterna di Scampia, an organisation which works to keep local kids off the streets.
“I decided to enter the contest because someone like me who was born in a difficult place must be able to find a way out,” di Palma said.
The closing stages of the competition were made all the more dramatic when di Palma was mistakenly eliminated from the final three – an error that was quickly rectified.
“Congratulations to Zeudi di Palma, the winner of Miss Italia 2021,” Naples mayor, Gaetano Manfredi, tweeted on Sunday.
“Pride of Scampia and of all of Naples.”
Di Palma is the fourth woman from the southern region of Campania to win the title of Miss Italy in the contest’s history and the first since 1986, when Roberta Capua won.
The regions with the most titles are Sicily, Lombardy and Lazio, with 11 each.
