The 35-year-old has captained his country on six occasions and will take over from Steven Gerrard if the Liverpool midfielder is unable to play through injury or suspension.
Lampard played a reduced role for Chelsea this summer and was rumoured to be one of the veteran players whose place in the England squad was under threat.
But he could now find himself lining up alongside Gerrard in the England midfield, with Hodgson praising Lampard and admitting his experience could prove to be vital in a relatively youthful squad.
"Frank Lampard is vice-captain," said Hodgson. "Frank's been the vice-captain all along in Steven [Gerrard]'s absences, which I think has been two, he's stepped up quite brilliantly.
"I've always thought that he was going to be a key member of this 23 because of his experience and what he brings to the team apart from pure footballing ability.
"He brings a lot of other things to us in terms of his leadership qualities and characteristics."
Hodgson also feels Liverpool captain Gerrard can use the World Cup to get over his disappointment at not lifting the Premier League trophy.
"He's had to swallow the disappointment of the last few weeks when he was close and had it taken away, and now he's got the World Cup," he added.
"He's got to get over that disappointment and get his World Cup head on and I know he will.
"He's very strong mentally. He cares desperately about Liverpool. But fortunately for me he cares equally desperately about England. So his mindset when it comes to England will be spot on.
"That's not to say that he won't retain a bit of disappointment that Liverpool came second and not first, he will because he's a human being.
"But I have great confidence in him that he won't take any negative thoughts into the tournament with us."