He moved to Graham Taylor's Watford where he helped the club as captain gain promotion to the First Division in 1981–82. Rice scored in Watford's first game in the top flight in 1982–83 against Everton before retiring from playing in 1984. In his final season he helped Watford reach the 1984 FA Cup Final. After Wilf Rostron was suspended for the game Rice was considered to replace him but was ultimately left out of the squad. In all the defender played a total of 137 times for the Hornets.