The 29-year-old man was convicted of sexual assault following a trial in August.
With the help of her grandmother, the young victim told the court the assault has had a devastating impact on her life.
"When I go to bed at night I cry," said the girl, reading from a statement during his sentencing hearing Friday. "I feel like it isn't fair. I didn't do anything bad."
In handing down the one-year jail term, territorial court Judge Bernadette Schmaltz called the assault "despicable."
"This is the exploitation of a small child by a parent," she said.
"Children who cannot protect themselves will be vigorously protected by the courts."
During the man's August trial, the girl testified she was under the supervision of her step-father in December 2003 while her mother was out of town.
One night, minutes after getting off the phone with her mother, the girl said her step-father asked her to join him in bed. The girl said she was hesitant at first, but eventually agreed, not wanting to disappoint him.
Once in bed, the man covered her head with a blanket, pulled down her panties and after spreading a lubricant on her vagina, inserted his finger.
As she recounted the assault on the stand, the girl said "it hurt" and she felt pain when she used the bathroom a short time later.
The man, who works on a two-week rotation at a diamond mine north of Yellowknife, continues to live with the victim's mother. The man's lawyer, Kelly Payne, said the couple eventually hope to "re-integrate" the girl into the family.
"This family will go on," she said. "(The man) regrets that this has happened."
Payne, who asked for a conditional sentence --typically house arrest -- stopped short of saying her client was responsible for the assault. The man declined to address the court during Friday's hearing.
Schmaltz, however, sided with Crown attorney Paul Falvo, who said a conditional sentence would not be punishment enough.
Pleased with the verdict
Outside the courtroom, Falvo said he was pleased with the verdict, which he hoped would shed light on the problem of sexual abuse in the NWT.
"The crimes we hear about involve the stuff that happens on 50th Street," said Falvo, referring to street violence and drug abuse.
"But there are lots of upper middle-class white people doing some pretty horrendous things behind closed doors."