The 35-year-old, playing in his first singles tournament since winning Wimbledon in July, eased past second seed Cilic 6-3 6-4 to take his third tour-level crown of the year.
Top seed Djokovic went through the tournament without surrendering a single set to become the first man to win on hard, clay and grass courts this season.
He told the ATP Tour's official website: "My approach is to win tournaments wherever I am and I'm glad that I have a team of people around me that makes sure that I am in the best shape in order to be a contender to win titles.
"That's why I came to Israel, to try to win the title. First time playing here [since a] Davis Cup tie more than 15 years ago, so it was a really amazing experience."
Djokovic was threatened only briefly as he served for the first set, producing back-to-back aces to deny Cilic the opportunity to break back.
The world number seven broke swiftly in the second too and pushed home the advantage to win the match in an hour and 35 minutes.
He added: "I played some very good tennis, I think. I [didn't] drop a set the entire week.
"I hadn't played a tournament in three months so it was really extra motivation for me to really do well, particularly because people have been so friendly and so supportive of me throughout the week. I'm taking some great confidence into next week as well."