The 87-year-old, who received the honour for his services to drama and charity from the Queen in June, was officially recognised today during the long-established investiture service, Sky News reports.
Lee is considered to be one of the most prolific actors of his generation and has appeared in over 150 pictures.
He is perhaps best known for his performances with co-star Peter Cushing in a string of successful Hammer horror films from the '50s and '60s, during which time he played famous monsters Dracula and Dr Frankenstein's creature in such movies as Dracula: Prince Of Darkness and The Curse Of Frankenstein, respectively.
"I've always been grateful for the opportunity to play [those] characters," he said of his Hammer days.
"It happened to be for that company which made me not always a face but a name all over the world which was extremely important at the time."
In recent years, Lee has been seen in both the Lord Of The Rings and Star Wars trilogies.
The star will next provide the voice of Jabberwock in Tim Burton's Alice In Wonderland, which is due out in cinemas on March 5, 2010.