Cavanagh, 31, wore the armband last season and Hill believes he is still the right man for the role as he prepares for his first full campaign in charge since returning to Spotland back in January.
"Peter Cavanagh has been brilliant since I've been back at the football club. When he plays he will be Captain," Hill told the club's official website.
"Peter is honest, he's a very good player to go to if you're a player and he's a very good player to go to if you're a manager.
"He finds himself in a good place at this moment in time and he understands the energy that I want from the players in around him. He understands his role in the team and he's quite capable of playing it."
He added: "If he's selected he will wear the armband and he has earned the right to do that. He has the respect of me, the staff, the players and hopefully the supporters because he's a very good player."