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Edit: After you do that try using steam in Big Picture Mode.
Do you have an XBox 360 wireless dongle at hand? You need that for the XBox 360 controller to be synced up to your computer. The dongle itself connects into a USB port. You should find one on Amazon or wherever that has them.
Ah I missed that part that you have a wired controller, mine is wireless and it connects with the Microsoft dongle that I have. But I use an XBox One wireless controller now and have had no issues with syncing it through the controller settings for Steam.
https://www.microsoft.com/accessories/en-gb/d/xbox-360-controller-for-windows
Try this out it may help.
You need to have X-Box checked, before trying to get Big Picture Mode to allow access...
No idea why, though... ~_~
I had the same issue, but once I checked PS3, everything started working again...
Steam Still Supports Wired Xbox 360 and Wireless Xbox 360 (using the wireless reciever)
See list of supported controllers here:
https://support.steampowered.com/kb_article.php?ref=9221-RTID-4643