Needing a victory to finish above Aston Villa in third place, Greg Rioch's side which included Ashley Cain, Jermaine Grandison and Curtis Wynter, were a goal down when Shaun Jeffers equalised just before half-time.
Jeffers then put City ahead in the second half with a screamer from the edge of the area for his 18th goal of the season, only for the Hornets to score twice.
City keeper Michael Quirke saved a penalty and with time running out, Jordan Clarke hit the equaliser to give Coventry a share of the points.