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(BBC)---Philip John Smith's hairpiece was taken away when authorities recaptured him after he fled the country, using the toupee as part of a disguise.
But he argued that his toupee was an "artwork" essential to his self-esteem.
A High Court judge in Auckland ruled that his "fundamental right to freedom of expression was ignored".
Smith is serving a life sentence in prison.
He was convicted and imprisoned in 1996 for murdering the father of a boy he had previously sexually abused.
He also has a string of other convictions, including extortion, aggravated robbery and sexual offences.
'Belittled, degraded'
In November 2014, while on temporary release for work, Smith fled to South America with an illegally obtained passport. He was soon caught in Rio de Janeiro by Brazilian authorities and deported home.
He quickly became an object of public ridicule in New Zealand when it was revealed that he was bald and had worn a wig while escaping.
Smith pointed to the media attention as part of his legal case to win back his toupee, saying he felt "belittled, degraded and humiliated".
He argued that the custom-made hairpiece was an "artwork" that was important for his self-esteem and self-confidence.
The convict, who represented himself in court, also accused prison officials of acting in an "arbitrary and discriminatory" way by confiscating his hairpiece as "payback".
High Court judge Edwin Wylie released his decision on Thursday siding with Smith, but declined his request for damages.
The court battle was the latest twist in a case that has gripped New Zealand and sparked calls for an overhaul of prison regulations.
Questions have been raised on how Smith was able to obtain a passport - which he applied for under a different name - and flee the country, as well as on the corrections department's temporary release programme.
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