Eleven month old Rory Davis had been visiting the grotto with his parents last Christmas when he started being ill as he approached Santa.
They took him home where his condition worsened and he was taken to hospital where doctors diagnosed him with the killer bug.
He battled for life for nearly a week and managed to make a recovery.
He is now to set to celebrate Christmas this year with his relieved parents.
His mum Verity Davis, 24, from Tipton, West Midlands, says: "We couldn't believe it when Rory fell ill in Santa's grotto.
"It was his first Christmas, so it was exciting to take him to visit Santa. We thought it was just a sickness bug and took him home immediately, but just hours later he was fighting for life in hospital.
It was incredibly bad luck to come down with meningitis in santa's grotto - and we are so thankful that we still have him with us this Christmas.
She says: "It was Rory's first Christmas so we were so excited. It was our first Christmas all together as a family and we decided to take him into a grotto at one of the department stores.
"We queued up at the grotto so that Rory could see the red-suited figure with the white long beard. There were two children before us in the queue and it was hot inside the grotto.
"I looked at Rory and thought he had suddenly gone very pale. He was then sick in Len's arms. We said a quick hello to santa and Rory sat on his knee. But Rory was hot and feverish so we only stayed a few minutes and then went straight home."
Verity gave him some calpol and put him to bed, but early in the morning she noticed several spots on his chest. She got a glass and placed it on the spots, but they didn't disappear.
"I knew that was a sign of meningitis so I started to panic. I knew that we had to get him to hospital quickly."
Tests revealed that Rory had meningitis and septicaemia and doctors had to act quickly to try and save him.
Verity says: "All I wanted to do was cuddle him but I couldn't. He was covered in wires and there was doctors and nurses all around him. We just couldn't believe what was happening to our little boy.
Less than 24 hours ago he'd been sat on Santa's knee and we had been so looking forward to his first Christmas. Now he was fighting for his life and we didn't even know whether he would live to see Christmas.
After an agonising four day battle Rory finally turned a corner. He was allowed home on Christmas Day but had to return to hospital every day for a week for more treatment.
Verity says: "It was upsetting having to take him back into hospital each day but at least he was on the mend. We couldn't believe how lucky he had been."
He is now back to full strength and tests have showed he is clear from any brain damage. Luckily his sight and hearing have also been unaffected.
His relieved mum says: "He has so much energy now, it's hard to keep up with him. It is terrifying to think how close we came to losing him. The doctors told us that if we'd left it another hour before bringing him into hospital then he wouldn't have made it. Our little boy wouldn't be here with us today.
"We are so looking forward to Christmas this year and Rory has been to see Santa in his grotto again.
"Meningitis nearly took our precious son and we feel very lucky to still have him with us this Christmas.
For more information about meningitis and its symptoms, visit www.meningitisuk.org