On 3 June 1756, the barony of Hyde held by his wife's ancestors the Earls of Clarendon was revived. Villiers was raised to the peerage as Baron Hyde of Hindon in the County of Wiltshire.
On 14 June 1776 the earldom of Clarendon, which had become extinct with the death of Henry Hyde, 4th Earl of Clarendon in 1753, was revived and Hyde was made Earl of Clarendon. In 1782 he was also made a Baron of the Kingdom of Prussia, an honour which he received Royal licence to use in Kingdom of Great Britain.
Clarendon returned to the office of Postmaster-General in commission with Henry Carteret, 1st Baron Carteret, in September 1786. This was to be his final political assignment.
Lord Clarendon died in December 1786, aged 77. He was succeeded in the earldom by his eldest son Thomas.
Lady Charlotte Barbara Villiers (27 March 1761 – 9 April 1810).
Robert Grimston, 1st Baron Grimston of Westbury's daughter, the Hon. Rosemary Sybella Violet Grimston, married the actor Charles Edward Underdown, on the 10th. February 1953. Charles Edward Underdown and Rosemary Grimston were sixth cousins, through their common ancestors Thomas Villiers, 1st. Earl of Clarendon, and Lady Charlotte Capell, according to Burke's Peerage, (Volume 2, page 1685, 107th. edition, 2003).
He bought and remodelled The Grove, a country house near Watford, Hertfordshire.