Hired in January, Carnell oversaw a rise from 23rd place in the 2024 standings to the Supporters' Shield in 2025.
Philadelphia improved year-over-year by a whopping 29 points to lead the league with 66 (20-8-6).
The Union lost one home game (12-1-4) and surrendered the fewest goals in the league (35) this season.
Carnell, 48, took over for Jim Curtin, who won Coach of the Year honours with the Union in 2020 and 2022.
The award was voted on by MLS club technical staff, media members and players. Carnell received 37.78% of the total votes to finish ahead of the Vancouver Whitecaps' Jesper Sorensen (26.53%) and San Diego FC's Mikey Varas (19.82%).
Carnell played for South African at the 2002 World Cup but spent most of his playing days in the German Bundesliga.
He was previously assistant coach at top South African club Orlando Pirates.