Kerr, who completed a final round of 2-under-par 69, had chance to take the title on the first extra hole, but couldn't drain a 5-foot putt for birdie.
She made up for it, however, when both golfers played the 18th for the second playoff hole.
This time, she took advantage when Pettersen overshot the green with her approach shot and two-putted for par and the win, claiming her third Kingsmill championship and 16th career LPGA Tour title.
Pettersen carded a 4-under 67 in the final round, with each golfer finishing at 12-under-par 272.
First- and second-round leader Ariya Jutanugarn fired a 5-under 66 Sunday, sharing third place at minus-10 with Ilhee Lee (67).
2014: The Year in Music [PHOTOS]