Hill, who started from fourth on the grid in his West Surrey Racing BMW 330e M Sport, was running in third place as polesitting team-mate Stephen Jelley and third-starting Josh Cook in his One Motorsport Honda Civic Type R battled for the lead.
Cook and Jelley had already exchanged the lead on a few occasions when Jelley tried to repass the Honda with a speculative move on the outside of the high-speed Westfield.
But Hill threw his BMW onto the grass to the inside and passed both of them in one move.
Cook then drew alongside Jelley over the start-finish straight to move into second position into Graham Hill Bend.
Hill instantly built up a lead of over a second, but the second safety car of the race eradicated his advantage.
George Gamble appeared to get caught out on the brakes into Druids, and his Speedworks Motorsport Toyota Corolla clattered into the One Honda of Jade Edwards, forcing them both out of the race.
Hill was undaunted, and set the fastest lap after the restart, thereafter keeping Cook at arm's length to win by 1.278s.
Jelley stayed close to Cook for the rest of the race, and was close behind at the finish to complete the podium.
Behind the leading trio, all of whom were on soft tyres, there was absolute warfare as the Alliance Racing Ford Focus STs of Dan Rowbottom, Dan Cammish and champion Ash Sutton scrapped it out with Bobby Thompson's Team Hard Cupra Leon, Ricky Collard's Speedworks Motorsport Toyota Corolla, and the Excelr8 Motorsport Hyundai i30 N of Tom Ingram.
Sutton's chances were kyboshed when he was edged onto the Cooper Straight grass as he ran side by side with Ingram. He was forced to the pits and recovered to 13th after the safety car.
Thompson also fell out of this group with alternator failure on the Cupra.
Rowbottom held fourth for much of the race, but a beautiful move by Ingram at Paddock with three laps remaining gave him the place from Rowbottom, Collard and Dan Lloyd's Team Hard Cupra.
Adam Morgan (WSR BMW), Cammish and Colin Turkington (WSR BMW) completed the top 10.
The first safety car was caused by Aiden Moffat parking his One Honda on Cooper Straight after contact at Druids with Mikey Doble.
Source: Autosport