Ms Shoesmith, 58, challenged a decision of the High Court which called regulator Ofsted, the former secretary Ed Balls and Children Haringey Council to act illegally.
Speaking after the hearing in central London, Ms Shoesmith smiled and said: "I'm on the moon. Absolutely thrilled. "
His lawyers argued that she was the victim of "procedural fairness" when she lost her job £ 133 000 per year as director of children's services at Haringey Council in north London.
She will now go before the High Court for a hearing on compensation and claims his right to a full salary and pension payments from the day she was fired in 2008 to today.
Ms Shoesmith was sacked in December 2008 after a damning Ofsted report exposed failings in his department following the case of Baby P, now named Peter Connelly.
James Maurici, appearing for Ms Shoesmith, told the court of appeal "buck passing that between Ofsted, Mr Balls and Haringey has led to him being denied natural justice and a fair hearing.
He said Ms Shoesmith had been very thought of a brilliant career officer with 35 years, but now face ruin.
She held a number of senior positions in education and with local authorities through the ranks to his post with Haringey in 2005.
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