The plaque installation had been organised by councillor Duncan Kerr after permission was granted by Oswestry Town Council.
Formed in Herefordshire in the 1960s, Mott the Hoople’s best-remembered single is 1972 hit All The Young Dudes, written by David Bowie.
The band split in 1974, but have reformed on a number of occasions for tours and live gigs.
Patterson, who himself is also a musician, said he was surprised by the number of people who turned out to attend the unveiling.
The round plaque, which features a lyric from Hunter’s 1976 track Irene Wilde, “gonna be somebody someday”, meant a “huge amount” to the family, he said.
“Growing up, we always knew who my granddad was, he was just pops to all of us. But then, obviously, when you have days like today, it really does just go to show how much of a legend he was and how much he’s loved by his fans,” Patterson explained.
“To have something commemorate not just his career, but his life and where he was born, it’s a massive thing for us as a family.”