The 22-year-old former Liverpool man has made 30 appearances for Leicester this term and is now reunited with former Foxes manager Nigel Pearson at the KC Stadium.
Hobbs has found first-team opportunities limited since the arrivals of Sol Bamba, Ben Mee and Jeffrey Bruma but will play a more prominent role for the Tigers as they challenge Leicester for a play-off berth.
Hull find themselves just three points behind Sven-Goran Eriksson`s men in 10th place in the Championship, seven points adrift of sixth-placed Leeds.
Hobbs arrived at Leicester from Anfield in the summer of 2009 following a season-long loan deal at the Walkers Stadium.
He has now made 130 appearances in total for the East Midlands club and only last season was voted player of the year and players` player of the year.