Chung was ranked 54th in the world coming into the tournament, and he beat the 37th-ranked Andrey Rublev of Russian Federation.
However, Chung refused to make things easy, winning back-to-back games to set up another tie break, which he won.
"I'm trying to create an image of being really strong mentally and I starting playing better and better", he said.
Chung revealed that his mind training had helped him in Milan, just days after he had suffered a first-round exit in Paris to Rafael Nadal. "He was the better player on the court", admitted the Croat. He was always in the match.
They are divided into two groups and play a round of group matches, followed by semifinals and a final.
The momentum swung his way in the third set as Rublev's frustration broke through at his inability to wear down Chung.
In the final, the Russian will face Hyeon Chung of South Korea who beat Russia's Daniil Medvedev 4-1, 4-1, 3-4 (4), 1-4, 4-0.
Pre-tournament favourite Rublev, ranked 37th and victor of his first title in Umag this year, had won his opener against Italian wildcard Gianluigi Quinzi.
The tournament also trialled new rules, including shortened sets, no-Ad scoring, shot clocks, Hawk-Eye line calls, and no lets on serve.