Zack Davies, 26, tried to kill dentist Dr Sarandev Bhambra, 25, in revenge for the murder of Fusilier Lee Rigby.
The racially motivated attack happened in Tesco in Mold in January and earlier this month Davies was jailed for life.
Speaking for the first time since the attack, Peter Fuller, 44, said it was "like something out of a horror movie".
"I will think about what happened for the rest of my life," he said.
"That's the image I still have in my head every night - him running towards me with the machete raised and dripping blood.
"It is like something out of a horror movie."
Mr Fuller spoke out about the ordeal before accepting an award for outstanding bravery from the Pride of Britain Awards.
Mr Fuller said he heard Davies shout "remember Lee Rigby".
"Initially I just thought it was kids larking about but then as I moved about four paces I saw a man on the floor surrounded by blood and the guy standing over him and hitting with a hammer," he said.
"I decided then that there was no way I was backing away.
"There was no-one else around me, they were all running and screaming, so I moved to one side to let Mr Bhambra run past and then I moved into the middle of the aisle and made myself as big as possible.
"I started shouting at the guy that what he was doing was madness and that I was ex-Forces. I made it clear that he was either going to have to go through me or he was going to stop."
During the trial, Gareth Preston, senior prosecutor for the Crown Prosecution Service Wales, said: "Such was the level of violence involved that, were it not for the extremely courageous actions of ex-serviceman Peter Fuller, this offence could have become an act of murder."
Mr Fuller will be honoured at the Daily Mirror's Pride of Britain ceremony at London's Grosvenor House on Monday night.
An ex-soldier who stopped a neo-Nazi beheading a Flintshire shopper with a hammer and a machete says he is still haunted by the savage attack.