A bright start featured Wesley Boyle breaking the deadlock on five minutes and the Villagers increased the control before half-time.
Celtic hit back after the break to 2-1 and pushed hard for an equaliser before Warner Mullen restored the two-goal gap for a key advantage.
“We had to make quite a few changes due to suspension and player unavailability,” said Boyle, a Loughgall player/coach. “We put in a great team effort to get the win, especially in difficult conditions with the pitch quite heavy.
“We moved Matt McMahon to right-back from his normal position of midfield and used Aaron Walsh as a centre-back.
“However, Matt then picked up an injury and forced us into a change, with Josh Finlay now back at the club.
“Josh came on for the injured Matt and looked good in his first game back.
“We played some good stuff and could have gone into half-time with a greater lead than 2-0.”
Boyle kicked off the scoring with a low drive following strong play inside the area by Mullen.
A Jamie Rea cross was then guided home by Daniel Ryan to increase the gap.
Celtic hit back but Mullen secured victory by putting Loughgall into a 3-1 lead.
The Villagers’ next fixture will arrive on Tuesday with a midweek derby date at Annagh United in the Bob Radcliffe Cup semi-final.
LOUGHGALL: Gareth Buchanan, Matt McMahon, Graeme Taylor, Stuart Mallen, Aaron Walsh, Wesley Boyle, Marcus Dallas, Jamie Rea, Gary Henderson, Warner Mullen, Daniel Ryan. Subs: Josh Finlay, Ross Wilson, Mark Dane, John Uprichard.
Kick-off on Tuesday at Tandragee Road will be 7.45 in the Bob Radcliffe Cup semi-final.