The Queen of Soul has been awarded the Pulitzer Prize Special Citation honour, becoming the first individual woman to earn the prize since it was first awarded in 1930.
The Pulitzer board said the award was given to the singer for "her indelible contribution to American music and culture for more than five decades."
Franklin died at the age of 76 on 16 August (17 August, NZ time) last year at her home in Detroit from pancreatic cancer.
Her niece and the executor of her estate, Sabrina Owens said the singer was blessed and the award was thrilling.
"Aretha is blessed and highly favoured even in death. She's continued to receive multiple awards - she's received almost every award imaginable and now to get the Pulitzer Prize, it's just amazing," Ms Owens said in an interview with The Associated Press.
"Aretha continues to bless us with her music and just paving the way for women going forward. It's thrilling. She would be so happy right now."
When Ms Owens heard the news that Franklin won a Pulitzer, she and the family were "surprised but in another way we were not because that's just the kind of person Aretha was."
"She was just very gifted and talented, and the world is still recognizing that," she said.
The Pulitzer board most recently awarded a special citation prize in 2010 to Hank Williams, the country music legend who died in 1953.
The superstar musician was the first woman inducted into the Rock and Roll Hall of Fame when she entered the prestigious organisation in 1987.
Franklin became a cultural icon and genius of American song, considered by many to be the greatest popular vocalist of her time.
She was also an accomplished pianist by her late teens and a superstar by her mid-20s. Raised in Detroit, she recorded hundreds of tracks and had dozens of hits over the span of a half century, including 20 that reached No. 1 on the R&B charts.
But her reputation was defined by an extraordinary run of Top 10 smashes in the late 1960s, from the morning-after bliss of '(You Make Me Feel Like) A Natural Woman', to the wised-up 'Chain of Fools' to her unstoppable call for 'Respect', transforming Otis Redding's song into a classic worldwide anthem - especially for the feminist and civil rights movements - making it one of the most recognizable and heard songs of all-time.
She sold millions of albums and won countless awards, including 18 Grammys, the National Medal of Arts and the Presidential Medal of Freedom, the nation's highest civilian honor.
She performed at the inaugurations of Presidents Barack Obama, Bill Clinton and Jimmy Carter, and even sang at the funeral for civil rights pioneer Rosa Parks and at the dedication of Martin Luther King Jr's memorial.
Rolling Stone ranked Franklin No.1 on its list of the Top 100 singers and she was also named one of the 20 most important entertainers of the 20th century by Time magazine.
Her Grammy-winning album, Amazing Grace, is one of the seminal albums in not only Franklin's discography, but the canon of American pop music.
It is the basis for the recently released concert film Amazing Grace, filmed over two sessions in January 1972 at the New Temple Missionary Baptist Church.