Hill, 49, has experience in guiding Bristol to promotion and up to third in the Premiership, and has also coached at Gloucester and Harlequins.
Chairman Cecil Duckworth said: “Richard has a proven track record of winning the Championship, taking a side into the Premiership and then onto the Heineken Cup in quick succession.”
Meanwhile, Worcester have also confirmed that former Harlequins boss Dean Richards has been working as an advisor for the club.
Richards, who was banned for three years from coaching following the “bloodgate” scandal, was part of a review conducted by the Warriors following their relegation from the Premiership. Worcester insist that Richards’ role was cleared by the RFU.