The project thinks it's still a non-Gradle based project; it's not the presence of the build.gradle file that makes it Gradle-based, but it's how the project was set up in the first place. You'll need to re-import your project to finish the conversion to Gradle.
First, though, it looks like you don't have a settings.gradle file; it looks like you need one. Since you've set up your project as a single-module project, then you can put the file in your project's root directory, next to build.gradle. It should contain this:
import':'
In the future if you add more modules to your project you may want to convert it to a multi-module directory structure, but you don't need to worry about that now. In any event, now you need to do the re-import in Android Studio:
- Close your project
- Back up your project
- Delete the .idea folder in the root directory of the project
- Delete all the .iml files in your project
- Import your project in Android Studio, and in the dialog that prompts you for a file, choose thebuild.gradle file.
After this you should be good to go.