Hodgson wanted the Spaniard to return to Anfield from his stint at the Tigers early so he could recover from a hamstring injury and provide cover for Jamie Carragher.
But City rejected the request, a move which the Reds' boss says worsened the 20-year-old's injury - and also damaged relations between the two clubs.
"We're very disappointed in Hull City," Hodgson told the club's official website. "I was disappointed to read that he's returned to his parent club through injury, when in fact he has returned because we're not prepared to loan him out to Hull anymore."
He continued: "We'd done them a great favour loaning him to them for so long and we couldn't believe that when we were in need of him, they said `no'. Then we wanted him here at least until such time that he got fit from his hamstring injury, which we thought would be the middle of December, but they refused that as well and insisted he went back there. And then with the treatment he has been given there his injury has now been aggravated."
Ayala is now recovering at the club's training ground and could go out on loan again when he recovers, although it won't be to the KC Stadium: "There is a possibility that if we didn't think we needed him we'd loan him out again - but certainly not to Hull City."
Source: PA
Source: PA