Clare Coogan Cole, who is Mr Coogan's daughter by his ex-girlfriend Anna Cole, works in an administration role helping with 'paperwork and correspondence' for one day a week.
West Bromwich East MP Mr Watson said the college student, a Labour activist, had been working at his Westminster offices.
He added: "She is a hard worker who has been putting in one day a week during her studies."
"She supports my staff and we are all very proud of her."
Mr Coogan and Mr Watson became friends during their time campaigning against press intrusion in the phone hacking scandal.
The Alan Partridge star appeared in Mr Watson's deputy leadership campaign video last year.
It also featured Eddie Izzard and footage of Mr Watson as a small boy.
The pair also linked up on the Save our NHS tour in the last few days before the general election.
The pair visited numerous constituencies across London together in a bid to 'save the NHS from the Tories'.
Earlier this week it emerged that Mr Watson had received £200,000 from former motor racing chief Max Mosley to run his private office.
Mr Mosley gave the money to Mr Watson last month via the Labour party in the middle of the attempted coup to oust Jeremy Corbyn from office.