Mrs Murphy took up her battle against the league after being told she could not use a cheap foreign provider to show games at her pub, The Red White and Blue, in Portsmouth.
But the European Court of Justice said the exclusive system was "contrary to EU law", leaving Mrs Murphy thrilled.
She said: "It's been the battle of the little guy - these corporate people feel they can throw money at things and just win."
Mrs Murphy said: "My reaction is relief, excitement, I'm thrilled.
"Last night I was very anxious and I didn't sleep very well and the relief is slowly hitting me.
"It has taken rather a long time, this has been going on for six years, but obviously it's been worth it.
"It's taken quite a chunk of my life but I'm glad I took it on. It's been like Karen versus Goliath.
"I found out the judgment this morning from one of my regulars, there has been a lot of support, it's been fantastic.
"My regulars have got quite used to being filmed and they don't mind apart from some of them when they weren't meant to be here - they are all football fans."
Mrs Murphy said she took on the battle because she could not afford the subscription fees.
She said: "I am sure the likes of the FA and Sky will do anything to protect their interests.
"I don't know how it will pan out, I hope it doesn't go back to the way it was as it's not fair for the customer, it's not a free market.
"They shouldn't have been as greedy in the first place.
"I paid £800 for a year's subscription compared to £700 a month for Sky in my small pub.
"In this climate that's a massive, massive boost to our income, I couldn't afford to have Sky and I couldn't afford to have it again, ever."
Mrs Murphy said the ruling will now return to the High Court which had referred it to the EU for clarification of the law.
She added: "It's been a lot of stress, it's been ups and downs, a lot of downs and thankfully now a few ups.
"We are 90% of the way now. I think I will be getting quite drunk this afternoon, a few glasses of wine, I think."
Regular Nicholas Whyley said: "I am absolutely thrilled for Karen and football fans up and down the country.
"Football will have to be as realistic as the rest of us.
"Football clubs will have to lower their prices to compete with the pubs because tere will be so many satellite channels showing it."
Mrs Murphy was ordered to pay almost £8,000 in fines and costs after she was taken to court by the League for using a Greek decoder in her Portsmouth pub to screen matches, avoiding the League's own controls over where its matches are screened.
But she took her case to the Luxembourg court which said today that some UK pubs had started using foreign decoder cards, issued by a Greek broadcaster to subscribers resident in Greece, to access Premier League matches.
The pubs buy a card and a decoder box from a dealer at prices lower than those of Sky, the holder of the UK broadcasting rights.
The landlady said she paid an annual fee of £800 for the foreign service but would have to pay £700 a month for Sky.
The judgment delivered today said: "The Court of Justice holds that national legislation which prohibits the import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums."
However, the judges said showing "protected works" - such as opening video sequences, the Premier League anthem or pre-recorded films showing highlights of recent matches - requires the authorisation of the author of those works.
The judgment went on: "By contrast, the matches themselves are not works enjoying such protection.
"That being so, the court decides that transmission in a pub of the broadcasts containing those protected works, such as the opening video sequence or the Premier League anthem, constitutes a 'communication to the public' within the meaning of the copyright directive, for which the authorisation of the author of the works is necessary, because when a pub transmits those works to the customers present on the premises the works are transmitted to an additional public which was not considered by the authors when they authorised the broadcasting of their works."
The verdict could mean a major rethink by the Premier League of its current exclusive agreements with Sky Sports - which provides the League with most of its television income - and ESPN.
The Premier League has already taken action against two suppliers of foreign satellite equipment and a group of pub landlords who used imported decoding equipment to show English Premier League games and avoid the commercial premises subscription fees for Sky.
The case against the landlords has now been settled but the League is continuing action against the suppliers of decoders.
PA
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