The Queen praised the former nursery teacher's courage when she presented her with the George Medal, second only to the George Cross as the highest award a civilian can win for bravery, in a ceremony at Buckingham Palace.
Ms Potts, 22, said after the ceremony: "This award is totally gobsmacking, it leaves me speechless.
"I thought I was going to cry at one point before I went on, because of the music, the atmosphere, everything."
The Queen had asked her how the children she saved had fared - some were left badly scarred by the attack by Horrett Campbell, 33, who is being held in a secure mental hospital for an unlimited period. Ms Potts said some of the children still had scars as a result of the attack last year at St Luke's Infant School, Wolverhampton.
"[The Queen] asked me how I was and how I was feeling. She said, `Yours was absolutely bravery'. "I said `thank you very much, your Majesty, but it was purely instinctive'. She smiled and shook my hand," Ms Potts added.
The medal is the 17th award she has received in recognition of her bravery in protecting the children from Campbell.Reuse content