The 20-year old keeper, on loan from Manchester United, recently signed an extension to his loan deal to the end of the season.
The result leaves Gillingham still in the bottom three, but will come as a welcome boost for new manager Stan Ternent.
The game exploded into life after just 15 minutes when Darren Byfield opened the scoring with his sixth goal of the season.
Steele let Byfield's 25-yard shot slip through his hands and into the back of the net in what should have been a comfortable save.
Gillingham should have doubled their lead but Steele made up for his early mistake by saving well from both Mamady Sidibe and Byfield.
Coventry fought back and hit the post twice as they went in search of the equaliser.
Captain Stephen Hughes will consider himself unlucky after his 25-yard drive cannoned back off the post, hitting Steve Banks on the back, before being hooked away before it crossed the line.
The visitors went into the break on level terms after Dele Adebola outjumped the Gills defence to head home Steve Staunton's curling cross on 37 minutes.
But there were all sorts of trouble after the break when Ian Cox scored two goals in a minute as Steele's nightmare worsened.
The young keeper failed to meet Nicky Southall's corner and Cox bundled the ball over the line for his first goal for the club.
Just a minute later Gillingham wrapped up the win as the two linked up again with Cox slotting the ball home at the near post before wheeling away in delight.
The goals rocked the visitors and they never really threatened the Gillingham goal as the match went on.