A series of errors saw Hart replaced by Costel Pantilimon in the City goal for seven Premier League games, sparking speculation over his future at the Etihad Stadium.
Hart appeared undeterred by manager Manuel Pellegrini's decision to replace him and fought to win back his place as City's first choice.
During his City exile, Hodgson kept faith in his first-choice goalkeeper - selecting him for internationals against Chile and Germany in November - and believes his City experience will have aided his character.
"Hart has had a good response," Hodgson said. "It must have been hard to lose his place and there was a lot of criticism at the time and I don't care how confident a character you are, or who you are, you are bound to be affected.
"We all know keepers are in the unenviable situation where their mistakes are highlighted and cost teams games.
"When Joe got his chance again he grabbed it with both hands and turned in good performances. I never doubted his ability to do it."
With the clock ticking towards June 2 when Hodgson will name his squad for Brazil, Hart remains the leading candidate for England's No 1 jersey.