In an exclusive interview, Dolly told "Extra" of Houston's passing, "It just hit me how connected we will always be, and how that song meant so much to both of us for different reasons."
"When they buried her and lifted up that coffin up, that song went into my mind... my heart just exploded and I started to cry like you wouldn't believe," the country star added.
The hit song, written and originally performed by Parton, was one of the first of her songs to receive wide acclaim from critics, and to attain vast commercial success.
In 1992, Houston's version of the tune became a massive worldwide phenomenon. It logs in at number 68 on Billboard's "Greatest Songs of All Time."
Parton has a new double disc live DVD and CD called "An Evening with Dolly," sold exclusively at Cracker Barrel.