Neal came off the bench ten minutes from time to convert Patrick Agyemang's low centre after a game in which the home side had largely dominated in terms of possession but failed to find a killer touch in front of goal.
It was the Saints' first defeat of the month and, after a brief resurgence, now face tricky away trips to Colchester and Barnsley as pressure mounts at the cash-strapped club.
They should have had the game well and truly sewn up by the time Neal arrived unmarked in the final minutes as, in a largely tepid first 45 minutes, it seemed almost inevitable a goal would arrive.
Andrew Surman should have done better when Rudi Skacel crossed from the byline, but the young Southampton midfielder completely mis-kicked from 12 yards out.
Adam Hammill then drove down the right-hand side and crossed into the path of Bradley Wright-Phillips but the striker tamely flicked the ball wide.
Wright-Phillips nearly broke the deadlock ten minutes later when he was fed by Jason Euell but took a touch allowing Matt Hill to get back in time and make a crucial last-ditch interception.
The second half was marginally more vibrant as the 200 Preston fans who had made the festive trip south, thought they had taken the lead three minutes after the break, but alas Paul Gallagher's near-post effort cannoned into the side-netting.
Former Birmingham midfielder Darren Carter then tried his luck from 25 yards with the ball beating Kelvin Davis but unfortunately striking the upright and rebounding away to safety.
As the game opened up with Southampton desperately chasing the three points, Preston goalkeeper Andy Lonergan was called upon to produce crucial saves from first Euell and then substitute Grzegorz Rasiak.
Those saves were to have even greater importance as Agyemang battled his way down the left-hand side and pulled the ball back for Neal to drill his finish past Davis.